Annuity Illustrations
Annuity Marketing, Sales Ideas, Suitability, and Issues by Michael J. Prestwich

If you sell annuities you probably know on December 17, 2008, the SEC enacted Rule 151A that redefines the definition of the term “annuity contract” under the Securities Act of 1933. The primary target of this ruling is fixed indexed annuities, but many in the insurance industry believe that this rule may soon extend to all fixed annuities because of the SEC believes the rule extends to annuities “if the amounts payable by the insurer under the contract are more likely than not to exceed the amounts guaranteed under the contract.”

ImagiSOFT, Inc. is sponsoring a promotion to help the National Association of Fixed Annuities (NAFA) fight this SEC rule. The heart of the SEC’s arguments center around suitable sales.  Through September 1, ImagiSOFT is offering a FREE two-year license to DataNet, a powerful software system to help you make higher quality annuity sales by following state suitability laws. Click this I Love Suitability link for details. This page gives an overview of state suitability law and how DataNet addresses these issues.  This page also explains how to get a lifetime free license to DataNet when you donate $250 or more to the NAFA Opposition Fund.

Lack of suitable annuity sales is the key argument that the SEC has used to defend their position why they should regulate fixed annuity sales instead of the states.  This argument has deep flaws. State suitability laws state that each agent should have a “system” to ensure that suitability laws are being followed, and that records must be kept (depending upon the state) from 3 to 10 years.  If you sell fixed annuities, make sure that you are not part of the problem — use a compliant “system” to follow state suitability laws, even if it is a thick, paper file.

Lastly, write a letter / email to your State Insurance Commissioner.  Tell them that you are following state suitability law, that you have a “system” to comply with the law, and that you believe that the state suitability law adequately protects consumers in your state.  Also write your State Representative and give him or her the same message, with the admonition to support the “Indexed Annuities and Insurance Products Act of 2009” recently introduced by Congressmen Greg Meeks (D-NY) and Tom Price (R-GA).  For more information see http://www.nafa151a.com/.

Please let your colleagues and associates know about ImagiSOFT’s free two year license to DataNet by sending them a link to this site.  The two-year free license offer ends September 1, 2009 so do this now.  The future of everyone who sells fixed annuities depends upon winning this fight!

This entry was posted on Monday, May 11th, 2009 at 5:14 pm and is filed under NAFA, SEC Rule 151(a), Suitability. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.