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CA Department of Insurance
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CA Department of Insurance

Insurance Commissioner Jones Applauds Governor For Signing Landmark Annuity Suitability Reform Bill

News: 2011 Press Release

For Release: September 21, 2011
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov

Insurance Commissioner Jones Applauds Governor For Signing Landmark Annuity Suitability Reform Bill
AB 689 Helps Protect Consumers Against Fraud

Insurance Commissioner Dave Jones today announced that Governor Jerry Brown signed AB 689, which will establish landmark consumer protections in the annuities marketplace. This sweeping legislation will protect the public, particularly seniors, from fraudulent activities involving these investment-related insurance products. AB 689 was sponsored by the California Department of Insurance and authored by Assembly Budget Committee Chair Bob Blumenfield (D-San Fernando Valley).

"For far too long, seniors have been victimized by insurance agents who aggressively market and sell annuity products that are simply unsuitable for them," said Commissioner Jones. "Many people unwittingly buy these products not realizing that their invested funds won't be available to them or they're terribly expensive to recover if they want to withdraw their money to pay for immediate expenses. It can be financially devastating to seniors on a fixed income. I want to thank Assembly Member Blumenfield for authoring this vital piece of legislation and the Governor for signing it into law."

"This breakthrough will help protect the hard-earned financial security of Californians, especially seniors, and end an alarming breeding ground for fraud," said Assembly Member Blumenfield. "Consumers are frequently sold annuities without understanding that their money will be unavailable for years and prohibitively expensive to recover in the short term. We now have stronger tools to go after scam artists who sell consumers financial products they don't need."

AB 689 requires insurers to verify that an annuity purchase is appropriate for the consumer based on an evaluation of his or her age, income, financial objectives, and other factors. It also authorizes the Insurance Commissioner to revoke an insurance agent's license, impose fines, and restore money lost to the consumer when suitability standards are violated.

AB 689 goes into effect on January 1, 2012.



Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

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