Law adds rules for annuity sales
Jul 1, 2008
South Florida Business Journal--July 1, 2008
Gov. Charlie Crist has signed a bill containing new regulations on the sale of annuities.
The bill is aimed at the practice of inducing consumers to cash in funds from a current investment or insurance product in order to purchase another investment product, often referred to as twisting and churning.
The bill makes that practice a first-degree misdemeanor and makes willfully submitting a false signature a third-degree felony.
It also requires that people who are licensed to solicit or sell life insurance to complete three hours of continuing education on suitability in annuity transactions, increases the penalties for offenses involving twisting and churning to up to $250,000 from $100,000, increases the period of time allowed for an unconditional refund to 14 days, enhances regulation of the sale of annuities to senior consumers and requires an agent to use an approved form in performing a suitability analysis relative to recommended investment.
"Annuity sales have become a big business in Florida, and seniors, in particular, often have fallen victim to unethical sales practices," Florida Insurance Commissioner Kevin McCarty said in a news release. "This new law will give Florida the enforcement power it needs to better protect our vulnerable senior population."