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Regulation and Compliance > Legislation

Sen. Warren Lists 29 Life, Health and Annuity Sales Incentives

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Sen. Elizabeth Warren has come up with a list of 14 life insurance, health insurance and annuity sales incentive offers.

The destinations range from Cancun, Mexico, to Venice, Italy. One gives agents a chance to qualify for an 11-day trip to New Zealand.

Warren’s staff describes the incentive travel offers in an appendix to a new report on life, health and annuity sales incentives.

The report also lists 15 companies that reward top agents and brokers with cash bonuses, increases in commission rate or other cash-based incentives.

Warren, a Democrat from Massachusetts, had her staff develop the report to support U.S. Department of Labor efforts to apply a fiduciary standard to advisors who help retirement savers move assets from tax-qualified accounts into other arrangements, such as annuities.

What it means: The report, which reveals some of the factors that might affect financial professionals’ product recommendations, provides a quick financial services sales incentive snapshot.

The data: Warren came up with the sales incentive descriptions by sending letters to 15 large annuity issuers in April.

Warren’s perspective: Warren supports tight restrictions on the kinds of incentive offers described in the new report.

“The industry’s secret kickbacks hurt consumers by incentivizing agents to sell certain products because they will earn a bigger cash bonus or fancier vacation, not because they are in their client’s best interest,” according to Warren’s staff.

The backdrop: The Labor Department developed a broad financial services sales fiduciary rule while Barack Obama was president.

The administration of Donald Trump let the Obama-era rule die in court.

The administration of President Joe Biden has developed a somewhat narrower rule. Annuity issuers have challenged that rule in court. In July, a federal judge in Texas blocked enforcement of the regulation and related guidelines. The Biden administration is appealing the stay.

The Labor Department itself endorsed moves by insurers and wholesalers to pay for training trips, as long as training is central to the events.

Credit: Adobe Stock


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