The maximum acceptable net loss for an annuity exchange is 5% for applicants younger than 80 years of age. For clients over 80, the net loss cannot be greater than 0%. For California exchanges, transactions resulting in a net loss greater than 0% but not exceeding 1% require additional Compliance review and approval before the exchange may proceed.

Net loss is calculated by subtracting the current surrender charge, inclusive of any applicable Market Value Adjustment, after adding any applicable premium bonus.

• Exchanges that involve a net loss exceeding 5% require additional review and documentation, including, but not limited to:
• A current account statement from the existing carrier
• For fixed indexed annuity replacements, the producer will provide a written narrative summary.
• Any exchange resulting in a net loss greater than 5% will require enhanced due diligence review and may be denied. These reviews will require extra processing time, as such cases may also be escalated to the Compliance Committee for review and approval.
• For owners 80 years of age and older, the maximum allowable net loss* before an exception review is 0%.
• For an exception review, the following is required:
• A current carrier account statement.
• A letter from the applicant acknowledging the surrender charge, penalty, or loss triggered by the proposed exchange, providing the amount of that loss, further details on their reasoning for this replacement in relation to his/her current financial objectives, and the reason this proposed contract better aligns with his/her goals.

Yes. AXI considers required minimum distributions (RMDs) as part of the annuity application review for all products. This includes evaluating whether the applicant needs to take an RMD from the proposed account, whether they are already taking RMDs from an existing account, and when future RMDs will be required.

If an RMD is required in the calendar year of a proposed 1035 exchange to AXI, we recommend that the RMD be taken from the ceding carrier before the application is submitted to AXI.

Withdrawals taken during the first contract year of an AXI annuity will incur a surrender charge, as the 10% free withdrawal provision is not available until after the first contract year anniversary.

For annuities that include a Premium Bonus or Enhanced Premium Bonus, RMD calculations will not include any unvested portion of the bonus.

Exchanges involving the forfeiture of an income rider are reviewed on a case-by-case basis.

There are additional sections within the application where the producer can state the client’s reasoning for this exchange.

• Producer’s statement – at the bottom of the page
• Suitability Questionnaire – Question 20
• Suitability Questionnaire - Producer Statement
• Side by Side Comparison Form - Section 2 Rider Comparison

AXI will not deny a case due to income rider forfeitures or Guaranteed Lifetime Withdrawal Benefits (GLWB) if such rider does not align with the client’s future financial objectives, as it may not be applicable to their future financial needs. If the client indicates income is an objective, we will follow up with the client and/or producer for additional clarification.

Regarding the forfeiture of a Guaranteed Minimum Death Benefit (GMDB), we will review the client's objectives, as such benefit may not be applicable to their future financial needs, before determining if the case has met suitability thresholds. If the client indicates passing assets to beneficiaries, we will follow up with the client and/or producer for additional clarification, if applicable.

AXI will apply any applicable premium bonus in the net loss calculation.

Yes, AXI will 1035 Exchange from life insurance policies.

We accept the following:

• Whole Life Insurance – builds cash value over time. You can use the accumulated cash value to fund an annuity.
• Universal Life Insurance – includes both traditional universal life and indexed universal life, because the accumulated cash value that can be surrendered for an annuity.
• Variable Life Insurance – Since the policy is invested in underlying investments, the value may fluctuate with market performance, so the amount available for the annuity may vary.

Yes, we will consider exchanges from life insurance policies that have active loans. Additional requirements apply - see next question.

• For policies funded by life insurance contracts with active loans against the policy, the following are required:
  • A current account statement for the life insurance policy.
  • A letter from the client confirming:
    • They no longer wish to keep the policy.
    • The current loan balance on the policy.
    • The payoff amount to be deducted from the policy’s value.
    • Their understanding that this transaction may be treated as a taxable event.

• Contracting can be completed via SureLC at www.surelc.com.

• Paper contracting submissions should be sent to contracting@axonicservices.com or faxed to (866) 860-7101.

• Contracting requirements should be sent to contracting@axonicservices.comor faxed to (866) 860-7101.

Factors considered:

• Bankruptcy: Must be discharged at least 12 months before applying. Open Chapter 13 bankruptcies or unpaid tax liens = automatic decline.
• Credit History: Up to $50,000 in collections allowed (medical excluded). Child support in arrears = automatic decline.
• Vector One Hits: Any hit = decline, unless proof of an active repayment plan is provided.
• Criminal History: Felonies = automatic decline. Misdemeanors reviewed case by case.
• License Issues: Revocations/suspensions reviewed case by case. FINRA barred = automatic decline.
• Untruthfulness: False answers on applications may result in denial.

Can a decline be appealed?

• Yes. Applicants may submit a written appeal with supporting documentation.
• Appeals are reviewed by AmFirst Legal with input from Axonic.
• Decisions are final.
• Agents approved on appeal may be subject to ongoing compliance checks (e.g., updated background/FINRA reviews every 6 months).

We will review on a case by case basis if the agent is making payments.

States where all levels of the hierarchy must licensed and appointed are as follows: FL, GA, LA, MA, NM, ND, PA, SD, UT, VA.

PA and NY.

NPN is used as the agent writing code on new business applications.

If a Principal agent is writing personal business, the agent's NPN will be used as the writing code.

We accept all AML providers, and the AML trainings must be completed and on file every 2 years.

Required minimum $1MM per claim and $1MM aggregate.

We will not issue the business until AML is in good order.

The agency must hold the E&O.

Best interest training is required in all states that have adopted the rule.

Yes, we will not issue paper checks.

Product training is located in the contracting packet. Agents must attest to reviewing the training materials prior to soliciting business.

Commission payments are processed daily.

Commission statements are accessible via the Agent Portal.

• Axonic does not allow for dual contracting.

• If an agent or agency has written business in the past 6 months, a release will be required to change the hierarchy. We accept all release forms.

Agent informational and banking changes should be sent to contracting@axonicservices.com.

No, the name on the account must match the name on the contract.

Yes, as long as the contracting and product training are complete.

You will need to contact the immediate upline for production requirements.

If the agency is contracted as an agency/corporation you would use the corporation’s NPN on all new business. If the principal agent wanted to write personal business, they would use their personal NPN number.

The date the background is approved.

No, we will not be charging the agent any appointment fees.

In the event that an annuity contract, for which commissions have been paid, a) has been surrendered by the Contract Owner; or b) a partial and/or full withdrawal is paid to the Contract Owner; or c) a lump sum payment has been made due to a death claim, will be subject to a chargeback equal to 100% in the first policy month and reduced by 1/12 each month thereafter through the end of the first Contract Year.  

In the event the contract is free looked, 100% of all up front commissions will be charged back.