Spitzer Targets Senior VA Sales

Birny Birnbaum, director of the Center for Economic Justice, Austin, Texas, said products such as variable annuities are among the most inappropriate for seniors.

“They are products with a long-term investment prospect for customers who have short-term cash needs,” he said.

In addition, the fact that many of these products have large penalties for early surrenders makes them inappropriate for seniors, Birnbaum said.

Regulators at first attempted to pass a model law aimed at ferreting out unsuitable sales of such products to consumers of all ages. But members of the life insurance industry argued that the states already had sufficient power and that the National Association of Securities Dealers, Washington, also had authority in this area.