We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!


media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us


Close [x]

Industry News


  • Industry Articles (16,323)
  • Industry Conferences (3)
  • Industry Job Openings (10)
  • Negative Media (138)
  • Positive Media (73)
  • Sheryl's Articles (606)
  • Sheryl's Blogs (173)
  • Wink's Articles (235)
  • Wink's Blogs (216)
  • Wink's Press Releases (94)
  • Blog Archives

  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • May 2008
  • February 2008
  • August 2006
  • FL Proposes Surrender-Charge Period Limit for Annuities

    January 9, 2010 by Heather Strickland

    Published 4/1/2009    

    Florida officials and insurance professionals have been butting heads over the “Safeguard Our Seniors Act,” a bill that limits the surrender-charge period for certain annuities, and caps the surrender charges at 5 percent of the annuity’s premiums.

    The bill, S.B. 1372, would limit to five years the surrender-charge period for an annuity sold to consumers ages 65 and older. Additionally, the bill would extend to 60 days the “free-look” period for seniors buying annuities, up from 14 days. During the free-look period, consumers can terminate their contract without penalty.

    Sen. Michael Bennett, R-Bradenton, FL, introduced S.B. 1372. A House version of the bill, H.B. 141, was introduced by Rep. Keith Fitzgerald, D-Sarasota, FL. Alex Sink, Florida’s Chief Financial Officer, has been particularly supportive of the legislation.

    “The need for the ‘Safeguard our Seniors’ legislation became prevalent by the increasing number of complaints the Department of Financial Services has received from seniors around the state who were lured into purchasing an inappropriate financial product by unscrupulous agents,” said Jayme O’Rourke, spokesperson for Sink. “CFO Sink has heard from hundreds of seniors around the state who, lured by a free lunch or other ploy, were convinced to liquidate their annuities, CDs, stocks, and savings accounts to fund new annuities, only to discover that they had been robbed.”

    O’Rourke added that the number of senior annuity investigations opened by the Department of Financial Services has increased 299 percent in the last four fiscal years.

    Kim O’Brien, executive director of the National Association for Fixed Annuities (NAFA), sees several problems with the legislation.

    “The product limitations incorporated in this bill will severely limit the product’s competitiveness and availability to consumers,” she said. “Florida is a large state with many individuals over the age of 65 who deserve the choice and availability of competitive annuity products with a wide array of features and benefits.”

    Sheryl Moore, president and CEO of the annuity market research group AnnuitySpecs.com, is also outspoken against the bill.

    “Twenty percent of the country’s seniors live in [Florida], and annuities are the one product that can protect an income that a person can outlive,” she said. “Limiting indexed annuity surrender charges to five years with five percent penalties would make it so that most companies wouldn’t offer annuities, simply because it isn’t cost effective, and that would limit seniors’ access to this valuable insurance product.”

    The bill also re-classifies cases of “churning” or “twisting.” Churning takes place when an agent convinces a consumer to replace an existing product for the sole purpose of generating commission revenue. Under the terms of the legislation, churning would be treated as a felony; currently, it is a misdemeanor. Agents who participate in churning will face an administrative fine of up to $5,000 for “nonwillful violations” or a fine of up to $40,000 for “willful violations.” However, criminal penalties will be enforced only if the churning involves fraudulent conduct.

    Other provisions include requiring the revocation of the license of any agent who has fraudulently sold an insurance or annuity product to a senior, and requiring insurers to provide information to consumers about the free-look period. If an agent’s license has been revoked for defrauding a senior client, the license may never be reinstated. The same penalty applies if a producer’s license is revoked twice for non-senior-related offenses.

    O’Rourke explained the reasoning behind such harsher penalties for fraud against senior clients.

    “Seniors – many of whom are on limited fixed incomes — need more protection afforded by the law than younger Floridians, who have more opportunity to recoup losses that they might incur through agent misconduct,” she said.

    Moore said that she understands where Sink and the legislature are coming from, and knows that they have seniors’ best interests at heart. However, she thinks there are much better ways to deal with abusive agents. She suggested that Florida adopt standard nonforfeiture laws, or create rigorous training requirements.

    “There are a lot of different things that are market-conduct and suitability focused that could help curb sales abuses, but changing the product isn’t going to change anything,” she said. “There’s a couple of bad apples in every barrel, and unfortunately those bad apples will find a way, regardless of the product used.”

    In fact, within the last year, Florida has taken some steps to prevent agent misconduct. Last June, the “John and Patricia Seibel Act” was signed into law. The legislation, named for an elderly couple who fell victim to an unscrupulous agent, requires all Florida agents to take a Senior Suitability Course before they can sell annuities to seniors. But, lawmakers feel that the law wasn’t enough.

    “Last year’s bill was only a step in the right direction,” O’Rourke said. “CFO Sink has done hearings throughout the state since last session and heard from state attorneys, insurance agents, insurance companies, and, most importantly, from victims of agent fraud. The proposals in the current bill are based on what [she] learned. The suitability provisions [in the Seibel Act] will increase protections for consumers, but rogue agents will still commit twisting and churning, and the felony penalty must apply to them like it does to a broker-dealer committing similar violations.”

    O’Brien, however, said that NAFA believes that the Seibel Act already provides the consumer protection lawmakers are looking for with the new bill.

    “Accordingly, it would appear that S.B. 1372 is redundant and unnecessary,” she said.

    Because of the overwhelming support Sink has given to the legislation, industry experts are nearly certain that S.B. 1372 will pass, at least in some form. But O’Brien said that NAFA is hoping to see some changes. For example, they hope that the 60 day free-look period can be shortened to 30 days, which is similar to some practices already in place.

    NAFA also would like to see the government “remove all surrender charges, surrender period, and commission limitations, because existing suitability and disclosure questionnaires required by the state’s new suitability requirements ensure consumers are aware of and consider surrender periods and charges when purchasing,” O’Brien said.

    For agents concerned about the bill, Moore suggests a proactive approach.

    “I suggest all agents doing business in Florida write or call Alex Sink’s office and [state insurance commissioner] Kevin McCarty’s office,” she said. “Let them know that they need choices for their clients when it comes to annuities and this prohibitive legislation will only hurt the residents of Florida.”

    But despite the strong sentiments coming from many insurance professionals, O’Rourke believes the bill will pass. The legislation has bipartisan support, and was passed unanimously in the Senate Banking and Insurance Committee. Plus, Sink has no intention of slowing her efforts any time soon.

    “CFO Sink believes that it is extremely important that we offer better financial protections for our growing population of senior residents and tougher consequences for those who try to defraud them,” O’Rourke said.

    Yet although the bill may protect seniors in one sense, others say it may also do a lot of harm. Moore is concerned that, if the bill passes, carriers won’t offer annuities in Florida, and seniors will lose access to a valuable financial product because of a few instances of abuse.

    “This law is like outlawing hammers because there is a guy who goes around murdering people with them,” she said. “Hammers have been used for a very long time. I can’t imagine building a house without one, but does that mean that they should be outlawed because somebody misused it? I don’t think so.

    “Unfortunately, some regulators are painting our industry with a very broad stroke and saying everyone in the industry must be bad, but that’s just not the case.”

    Heather Strickland is the regional editor of the Agent’s Sales Journal. She can be reached at HStrickland@AgentsSalesJournal.com, or 800-933-9449 ext. 225.

    Originally Posted at Agent's Sales Journal on April 1, 2009 by Heather Strickland.

    Categories: Sheryl's Articles