Florida Gov. Charlie Christ has signed a new law increasing penalties on annuity salespeople who pressure elderly clients to buy annuities that the clients do not need or do not want.
The new law, S.B. 2082, increases maximum fines to as much as $250,000, from $100,000, for “unfair or deceptive” annuity sales activities, including the practices known as “twisting” and “churning.”
As defined by Florida officials, twisting refers to an agent intentionally making misleading statements or significant omissions about annuities or insurance policies to persuade a consumer to sell a current annuity and buy a new annuity from another insurer.
Churning involves convincing a client to surrender an existing annuity to buy another one from the same company.
The Florida Association of Insurance and Financial Advisors, Tallahassee, applauded the legislation, noting the law also requires agents in the state to receive at least 3 hours of training on annuity suitability.
In addition, the law mandates that insurers and producers give objective financial information to seniors about annuities they propose to sell them, and it requires agents to use a state-approved form for performing a suitability analysis.