The Insurance Forum got it wrong
I have been a follower of Joseph M. Belth’s The Insurance Forum since the Mutual Benefit Life and Executive life days. His calls concerning capitalization were correct; however theses were financial matters, not a legal matter. In his latest comments, he expressed surprise that the appeals court overturned the Glenn Neasham verdict. This demonstrated a lack of understanding between a civil and a criminal matter.
Neasham was not a criminal. He posed no threat to society by presenting and selling a fixed annuity to an 82-year-old woman, whether or not she suffered from dementia. Joe Belth argues “unsuitability”. This is debatable and a subjective standard. For example, if Fran Schuber was 82 years old and worth $5 million, is it unsuitable to have $175,000 in a fixed annuity? What if she was worth $50 million? What if she was worth $500,000, but the house was paid for and Social Security and a pension covered all of her needs?
He gave an example of an attorney declining to work with Schuber because the attorney thought she had dementia. (This is also not right-denying legal representation. The attorney should have made a strong recommendation to set up a guardianship if this was really thought to be the case.)
The Appeals Court got it right
The appeals court got it right. The Neasham case is not a crime. I have been saying this since I heard the facts of this case. The jury, lower court, prosecutor, and Belth got it wrong. I am not sure if these individuals are aware that we have over two million people in prison in the United States — more than Russia or China.
I am not sure if they are aware that the cost to maintain an individual in our prison system is $40,000 a year.
I am not sure if these individuals are aware that civil matters should not be reclassified as crimes.
Should Joe Belth be arrested for engaging in unauthorized practice of law by opining on a legal matter when he is not an attorney? If he was arrested, I think it would change his mind about reclassifying civil matters into criminal matters.
Also, the appeals court was right in mentioning that the product was approved by the state up to age 85. I hammered on this issue for years.
Suitability standard have no standards or guidance
Finally, there is no real good guidance on “suitability.” Producers need guidance, as does everyone else in any forum. If states create a standard called “suitability,” (which they all must adopt shortly due to Sarbanes), guidance should come with it, and procedures to protect both parties must be made known and made clear. A hotline should be established by the state for producers to call if they have questions. They should be able to email facts to receive clearance, if necessary. For example, the Florida Bar and other Bar associations have ethics hotlines.
Due to lack of guidance and an aging population, we will continue to see more litigation and arbitration in this area.