Volume 1 Number 27
July 5, 2004










TEXT VERSION

 


GALLAGHER COMMENDS GOVERNOR, LAWMAKERS FOR ENDING ABUSIVE PRACTICES IN ANNUITIES SALES

Florida’s Chief Financial Officer Tom Gallagher applauded Governor Bush and state lawmakers today for enacting legislation which puts an end to abusive sales practices used by unscrupulous insurance agents selling annuities to seniors. 

“Annuities can be an effective investment tool for many Floridians wanting a steady stream of income for retirement,” said Gallagher.  “But too many of our state’s seniors have been preyed upon by agents who are motivated by commission payments, not consideration of a senior’s financial circumstances.  Now with this legislation, we will hold companies and agents accountable for the products they sell and the investment advice they give.”

An annuity is an insurance contract that offers a guaranteed series of payments over a period of time.  Under the legislation, which was amended onto Senate Bill 2994, insurance companies and agents offering annuity products to seniors over the age of 65 are required to clearly document the basis for selling the product, including consideration of a senior’s financial and tax status, as well as investment objectives.  It also gives the Department of Financial Services the authority to take corrective action if a company or agent violates the law. 

Gallagher proposed this legislation in response to calls and letters from hundreds of seniors and their families who told the department they were convinced to liquidate CDs, stocks and savings accounts to fund annuities only to discover these actions robbed them of access to their savings.  

Florida is currently home to more than 2.9 million Floridians over the age of 65.  According to Gallagher, the state’s senior population is projected to grow by as much as 30 percent over the next several years, and many of these seniors will look into investing in annuities. 

“This legislation is so important as more and more seniors move to Florida and seek to invest their hard-earned savings,” Gallagher said.  “I thank the governor for signing this legislation to protect our most vulnerable citizens.”