Insurance Commissioner Dave Jones Announces Passage Of Landmark Annuity Reforms To Protect Consumers
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced that the California State Legislature unanimously passed landmark insurance annuities reform legislation. With Californians spending $20.7 billion on annuities in 2010 alone, he urges Governor Jerry Brown to sign these two important bills aimed at protecting consumers, particularly seniors, from potential abuse in the annuities marketplace.
AB 689 authored by Assembly Budget Committee Chair Bob Blumenfield (D-San Fernando Valley) would require insurers to establish comprehensive standards and procedures to make sure annuities purchased, exchanged, or replaced by a consumer are suitable for them. Seniors, in particular, are targeted by unscrupulous insurers and their agents selling them unsuitable annuities that could lead to devastating financial consequences.
"After several years of failed attempts to pass similar legislation, I'm pleased that we prevailed in getting this annuity suitability legislation passed to protect hard-working consumers and vulnerable seniors from abuse and exploitation of harmful financial investment transactions involving annuities," said Commissioner Dave Jones. "California needs a comprehensive system that requires that insurers supervise and ultimately take responsibility for insurance producer annuity recommendations and sales in California."
Commissioner Jones also urges Governor Brown to sign AB 793 authored by Assembly Banking and Finance Committee Chair Mike Eng. The bill would prohibit unscrupulous insurance agents and brokers from participating with, employing, or making referrals to an individual involved in the sale of reverse mortgages with the sole purpose of cross-selling inappropriate and unsuitable noncasualty insurance products such as an annuity.
"There is an increasing need for this bill as the growth of the reverse mortgage business has led to aggressive marketing and abuse especially when they are marketed along with insurance products such as annuities," said Commissioner Jones. "A reverse mortgage should be an option of last resort only for seniors with an immediate need for cash and have no other means."
Both measures passed out of the California State Legislature with strong bi-partisan support.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.