Buckeye State annuity issuers are trying a new, standardized approach to describing fixed annuities and indexed annuities.
The Ohio Department of Insurance is running the voluntary Annuity Disclosure Pilot Program with help from the Association of Ohio Life Insurance Companies, Columbus, Ohio; the American Council of Life Insurers, Washington; NAVA, Reston, Va.; and the National Association of Insurance and Financial Advisors, Falls Church, Va.
The industry groups worked together in an effort to create annuity disclosure forms that would provide clear, consumer-friendly information in a format that could stay the same from state to state, Ohio Insurance Superintendent Mary Jo Hudson writes in Ohio Bulletin Number 2009-09.
Iowa insurers began testing the annuity feature disclosure forms.
The forms cover topics such as how surrender charges work; how interest is calculated and when it is credited; and what in an annuity contract is and is not guaranteed.
After talking to Iowa insurance regulators, the Ohio Department of Insurance has decided that pursuing efforts to make annuity disclosures more consumer-friendly is in the best interests of Ohio consumers, Hudson writes.
To participate in the program, which started April 1, insurers must notify the Ohio department in writing that they want to participate.
“Companies should not use any template in Ohio before providing the required notice,” Hudson writes.
Insurers also must notify the department if they feel they are not yet ready to participate in the program.
Companies that do use the pilot program disclosures need not provide any other disclosures other than The Annuity Buyer’s Guide, Hudson writes.