Vermont, Insurer In Accord On Annuity Sales
April 29, 2010 by Trevor Thomas
The Vermont Department of Banking, Insurance, Securities and Health Care Administration has approved a settlement agreement that resolves an investigation involving suitability of indexed annuity sales.
The Vermont department negotiated the agreement with Allianz Life Insurance Company of North America, Golden Valley, Minn., a unit of Allianz S.E., Munich, Germany, officials say.
The agreement concludes an investigation by the Vermont Department of Banking, Insurance, Securities and Health Care Administration of indexed annuity sales that Allianz completed in Vermont from 2002 through 2005, department officials say.
Department investigators found that some Allianz annuities were sold to seniors aged 65 and older who later surrendered their annuity at a loss, and some of those sales might have been unlawful because producers failed to get sufficient information from those seniors to evaluate the products’ suitability for them, officials say.
Allianz has since rectified the practices the department had objected to, according to Paulette Thabault, the Vermont insurance commissioner.
After reviewing the changes Allianz has made in annuity sales practices, the Vermont department praised the company for “its proactive efforts to comply with Vermont law and properly represent products to consumers,” department officials report.
The department found that some beneficiaries in Vermont were not paid the proper amount of interest on their life and annuity claims during the period examined, officials say.
Allianz agreed to pay the amount the beneficiaries should have received, officials say.
“We are committed to complying with Vermont law and, equally importantly, to ensuring that the interests of our contract holders are safeguarded,” Allianz says in a statement about the agreement.
The company says it put a suitability review program in Vermont in effect in July 2005, before the examination began.
“It is important to note that the department’s issues regarding the Allianz suitability review program focused exclusively on the period before company implemented its program,” Allianz says. “In fact, the department expressly acknowledged in the settlement agreement that it was ‘satisfied with the company’s current processes and procedures with respect to suitability.’”