State suitability review is the process by which a state's insurance department or its designated review entity evaluates whether annuity and, in some jurisdictions, life insurance recommendations meet state suitability or best-interest standards. Carriers must submit case files, including applications, disclosure forms, and documentation of the producer's recommendation basis, to confirm that product type, features, and funding are appropriate for the client's age, financial situation, time horizon, objectives, and risk tolerance. Some states perform pre-issue reviews for certain annuities, while others conduct post-issue sampling or targeted audits. State suitability review helps enforce NAIC model regulations and state-specific rules designed to prevent abusive sales practices, churning, and unsuitable exchanges. The process can delay policy issuance if information is incomplete or reveals concerns about the recommendation.

Advisors encounter state suitability review when submitting annuity business in states that require carrier-level or third-party screening before policy issue. They must ensure that needs-analysis forms, replacement comparisons, and disclosure documents are completed thoroughly and consistently. When a case is flagged, carriers may ask for additional clarification or documentation to satisfy the state's review standards. Advisors who understand state suitability review build compliant fact-finding and documentation habits into their practice, reducing delays and declines. They also stay current with evolving best-interest rules that can expand the scope and depth of these reviews. Proper preparation for state suitability review protects clients, producers, and carriers while supporting long-term, regulator-approved sales growth.