This is how it came to be known as the “10/10” rule.

November 26, 2025 by Sheryl J. Moore

Just so you know…

There was a HUGE problem with high commission, long surrender charge, high bonus annuities just before/after the turn of the century. Seniors were being taken advantage of using these products, which were often indexed annuities. That got regulators’ attention.

In response, just before 2005, I started to see individual states begin selectively enacting desk drawer regulation, referred to as “70/10.” This rule indicates that certain states will not permit insurance companies to file new products in their state, which exceed a 10-year surrender charge, nor a first-year penalty of 10%.

This is how it came to be known as the “10/10” rule.

Interestingly, vesting schedules and recapture charges on indexed annuity premium bonuses are just a way to extend/increase the surrender charges on the contract.

We use this innovation to ensure that we can get a [10%] premium bonus on a 10-year contract these days. Or maybe it is 27% bonuses? Anyhow…

Thank goodness we don’t have those high commissions anymore! -sjm

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