Insurance Department Alerts Seniors to Predatory Annuities Sales Practices
Reports of deceptive conduct being used by some agents to sell products
COLUMBUS — Due to an increase in predatory sales practices associated with the sale of annuities, the Ohio Department of Insurance is alerting seniors about how to avoid becoming a victim, Insurance Director Mary Jo Hudson announced.
The Department has recently received information that some agents are “churning“ business by encouraging their senior clients to replace an old annuity product with a new annuity product that allegedly offers a higher rate of return. In many cases, the replacement is unnecessary and the senior citizen could face high surrender charges and fees if they need to withdraw money from the annuity. Since there are substantial commission rates associated with the sale of annuity products, some agents may recommend an unsuitable product to a senior for their own personal gain.
“Ohioans need to carefully review any insurance product they are considering and consult a trusted advisor or the Ohio Department of Insurance at 1-800-686-1526 with any questions,“ Director Mary Jo Hudson said. “We are closely watching the marketplace to assure Ohio-licensed insurance agents are selling suitable annuity products to seniors.“
Rules that became effective in March 2007 give the Department more regulatory authority and oversight over the sale of annuity products. Not only were suitability standards put in place, the new rules clearly provide Ohio-licensed insurance companies and agents with an outline of what is considered appropriate annuity sales conduct.
For the rest of this article please visit www.ohioinsurance.gov.
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