An annuity suitability standards bill, A.B. 689, has made it through the California Legislature and is waiting for the signature of Gov. Jerry Brown.
The bill passed in the state Senate by a 34-0 vote; it passed in the Assembly by a 79-0 vote in May and by a 76-0 vote last week.
Brown has until Sept. 9 to sign the bill, officials say.
California Insurance Commissioner Dave Jones says he is glad to see A.B. 689 pass after “several years of failed attempts” to get an annuity suitability bill enacted.
“California needs a comprehensive system that requires that insurers supervise and ultimately take responsibility for insurance producer annuity recommendations and sales in California,” Jones says in a statement.
A.B. 689 is California’s response to a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act that encourages states to adopt annuity standards that are at least as rigorous as the suitability standards in the Suitability in Annuity Transactions Model that was approved by the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., in 2010 or else face the possibility that they might lose the right to regulate products such as indexed annuities.
Today, California requires annuity sellers to give consumers replacing annuities at least 30 days to get their money back, and it also prohibits annuity sellers from using materially inaccurate presentations to recommend that senior citizens buy unnecessary replacement annuities, according to an A.B. 689 analysis prepared by the Assembly staff.