The very busy pen of Gov. Jerry Brown signed into law today a new power for the state insurance commissioner to strip a life insurance agent’s ability to transact variable life insurance contracts as soon as he learns that the agent is no longer registered to transact securities by either the SEC or FINRA.
Currently, the process is time-consuming, says the California Insurance Department, “leaving the door open for a life agent to continue selling these insurance products when they are no longer authorized to do so.”
The law, from the bipartisan bill AB 1416, steamlined other sections of the state insurance code sections regarding agent licensing and training, insurer-related filing requirements and administrative processes relating to insurance companies.
“I am very pleased to have this new authority,” said Commissioner Dave Jones. “Timelier removal of a life agent’s variable contract authority helps me to better protect consumers from agents who are not authorized to sell annuities or the other complex variable life contract products. In light of the enactment of AB 689 – the landmark annuity suitability bill that I sponsored – this particular measure is especially important.”
Jones’ effort to protect seniors and mandate suitability standards for insurers passed the state legislature in late August and was signed into law a month later, on Sept. 21.
AB 689 would require insurers to establish comprehensive standards and procedures to make sure annuities purchased, exchanged, or replaced by a consumer are suitable for them.
Californians spent $20.7 billion on annuities in 2010, according to the department.