Date: August 1, 2007
For more information contact: Mikaela Reck, Public Information Officer, (608) 267-9336 or email@example.com
Annuity Sales Committee Appointed
Madison, WIInsurance Commissioner Sean Dilweg today announced the creation of a special committee to analyze the annuity sales marketplace in Wisconsin. The committee's charge is to make recommendations to better protect Wisconsin annuity consumers from unsuitable sales and abusive sales and marketing practices in this growing area of insurance.
"We've created a committee specifically for the task of reviewing annuity sales," said Dilweg. "We feel that it is time to get a better handle on what we can do about the questionable sales practices we've been seeing in our complaint files and hearing about in the market."
The Annuity Sales Supervision Advisory Committee will review current insurance industry practices in the supervision of its producers' sales of annuities, along with some of the abusive sales tactics associated with these products, and work to recommend regulatory standards for future sales. The committee will be chaired by Deputy Commissioner Kimberly Shaul and will be made up of representatives from consumer groups, state legislators, agents and producers, insurance industry representatives, as well as regulators of other financial institutions and products.
The Office of the Commissioner of Insurance (OCI) has seen some very questionable annuity sales practices over the past several years, especially when seniors are involved. The tax consequences of surrendering an annuity coupled with, at times, high and long-lasting surrender charges calls into question the suitability of some of these annuity sales. Annuity policies vary widely and consumers should have a good understanding of the annuity prior to purchase.
"While many companies and agents are working to provide their customers with a suitable and meaningful product, this is a project which we believe will result in better regulatory tools to address those companies and insurance agents who are abusing the system," said Deputy Commissioner Kimberly Shaul. "By bringing all parties to the table to evaluate industry standards for supervising marketing practices and specifically addressing some of the unacceptable sales tactics we have seen, we can put all players in the marketplace on an even playing field."
The Annuity Sales Supervision Advisory Committee is scheduled to begin meeting at the end of this summer and is expected to make final recommendations to the Commissioner within 18 months.
For questions about what annuities are please see the publication Understanding Annuities which can be found in the publications of our Web site at oci.wi.gov.
Created by the Legislature in 1871, Wisconsin's Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. Today, OCI's mission is to lead the way in informing and protecting the public and responding to its insurance needs.