California Insurance Commissioner John Garamendi is asking life insurers doing business in the state to adopt suitability standards for selling annuities to seniors.[@@]
In a letter to insurers, Commissioner John Garamendi said his office has received numerous complaints about problems with annuities sold to seniors, including sales of products that do not mature until after the insured’s death.
Other problems Garamendi cited include failure to disclose tax consequences of annuities; unexpected surrender charges; and loss of death benefits or other types of benefits when selling a deferred variable annuity.
“Insurers, brokers and agents owe it to their clients to deal from a position of honesty, good faith and fairness,” Garamendi said.
The state insurance department is also sponsoring legislation, SB 192, that would require the industry to establish annuity suitability standards.