Attachment I: Annuities Products & Practices

SB 620, 2003, (Scott, Chapter 547), Annuities: life insurance: required disclosures and prohibited sales practices.

An act to amend Sections 787, 1725.5, 10127.10, and 10509.8 of, and to add Sections 789.9, 789.10, 1724, and 1749.8 to, the Insurance Code, relating to insurance.

• Enacts additional restrictions on advertising practices that target senior citizens and would expand the scope of existing restrictions, currently applicable to disability insurance, to life insurance and annuities.
• Prohibits the sale of annuities to seniors in certain circumstances.
• Prohibits insurance advisers, brokers, and solicitors who are not attorneys from sharing commissions or other compensation with attorneys.
• Requires, effective January 1, 2005, specific training for life advisers in order for these producers to sell annuities, unless the advisers are nonresident advisers who represent a direct response provider, as defined.
• Limits the investment of premiums during the 30-day cancellation period, except as specified, and revises the disclosure requirements applicable to the sale of life insurance and annuity products to seniors.
• Imposes restrictions on the sale of life insurance policies and annuities in the home of a senior citizen.
• Prohibits an agent or insurer from recommending the unnecessary replacement, as defined, of an annuity by a senior citizen.
• Imposes certain duties on the Insurance Commissioner in this regard, and enacts other related provisions.