Monday, March 23, 2009
Florida annuity proposal worries insurance industry
As Florida weighs proposed legislation that could make it easier to toss annuity salespeople into prison, agents and the insurance industry are rallying to fight the bill...
...Under the bill, which would apply to sales in Florida to people over 65, the surrender periods — or the length of time an investor must keep an annuity — would be set at a maximum of five years. The surrender fee — or what investors are charged for early withdrawal from the product — would be set at a maximum of 5% and would be lowered to 0% by the end of the fifth policy year. That could take a bite out of sales commissions, agents fear.
An additional provision would also hit agents and advisers with a third-degree felony charge and a maximum of five years in prison if they made misleading representations about a policy, which is known as "twisting," or if they encourage a client to surrender or withdraw from a product in order to buy another annuity, which is known as "churning." ...
...According to the ACLI, Florida accounted for $23.1 billion in direct annuity premiums in 2007, the latest year for which data are available.
Investment News: Florida annuity proposal worries insurance industry
...Under the bill, which would apply to sales in Florida to people over 65, the surrender periods — or the length of time an investor must keep an annuity — would be set at a maximum of five years. The surrender fee — or what investors are charged for early withdrawal from the product — would be set at a maximum of 5% and would be lowered to 0% by the end of the fifth policy year. That could take a bite out of sales commissions, agents fear.
An additional provision would also hit agents and advisers with a third-degree felony charge and a maximum of five years in prison if they made misleading representations about a policy, which is known as "twisting," or if they encourage a client to surrender or withdraw from a product in order to buy another annuity, which is known as "churning." ...
...According to the ACLI, Florida accounted for $23.1 billion in direct annuity premiums in 2007, the latest year for which data are available.
Investment News: Florida annuity proposal worries insurance industry
Permalink posted by markw @ 5:19 AM 
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