Insurers should make sure that current and former producers refrain from using “rumors” about other insurers’ finances to drive life and annuity replacement sales.
Iowa Insurance Commissioner Susan Voss delivers that warning in Bulletin 09-04.
Voss has addressed the bulletin to all insurers and licensed producers in Iowa.
Iowa insurance laws “expressly prohibit insurers and insurance producers from making statements that disparage other insurers or are derogatory to the financial condition of any insurer,” Voss writes in the bulletin. “Such practices are considered unfair or deceptive acts or practices.”
Insurers and producers also should remember Iowa rules regarding the replacement of an existing policy or contract via issuance of a new policy or via a financed purchase, Voss writes.
The Iowa Insurance Division “expects insurance carriers to carefully monitor all replacement activity by its producers and ex-producers,” Voss writes. “Insurers shall report to the division any trend in activity that indicates that 2009 replacements or disbursements are increasing in comparison to 2008 activity.”
When producers and insurers replace a life policy or annuity contract, they should document the reasons that they believe the replacement is suitable, Voss writes.
“The division will review all reports of violations of Iowa insurance laws and regulations and will conduct market conduct investigations against insurers and insurance producers suspected of misconduct,” Voss warns.