January 1, 2009
CFO Sink warns annuity fraudsters: tougher laws now on the books
Florida Chief Financial Officer Alex Sink's 2008 legislative push to target agents using predatory annuity practices against seniors now results in tougher penalties for fraudsters in Florida. Effective January 1, 2009, SB 2082 strengthens the fines against agents who target Floridians using fraudulent annuities sales practices. The legislation also makes it a third degree felony to submit a fraudulent signature, prohibits agents from using fake designations to falsely imply financial expertise, and clarifies and strengthens suitability requirements that agents must meet when selling an annuity to a consumer.
"This legislation represents a good first step," CFO Sink said. "We were able to increase protections for seniors and punish agents who commit financially devastating crimes. That said, I will continue to push for it to be a felony to intentionally deceive a senior into an inappropriate annuity product. And I'm not going to rest until we're able to put unscrupulous agents that prey on our seniors behind bars."
Highlights of amendments to F.S. 627.4554 – Annuity Investments by Seniors (effective 1/01/09):
- Agents licensed in Florida must take a minimum of three hours of continuing education on the subject of suitability in annuity and life insurance transactions.
- Any person who willfully submits fraudulent signatures on an application or policy-related document commits a felony of the third degree.
- Any agent who misuses a designation to imply they have specialized training or knowledge or misrepresents their actual qualifications, commits a violation of the unfair trade practices.
- Significantly expands the type of information the agent is required to collect from the senior consumer to determine suitability when recommending an annuity.
- Requires the agent to complete a detailed comparison form comparing the benefits of the senior consumer's existing annuity to the one being recommended by the agent as a replacement.
- Increases the period in which the consumer can obtain an unconditional refund if the consumer decides not to accept the life or annuity policy from 10 to 14 days from the date the policy is received.
- Imposes fine maximums of $30,000 for each willful violation of twisting, churning and submission of fraudulent signatures.
Every day, hundreds of Floridians fall victim to financial fraud. Many of these victims are trusting seniors who were misled into making risky or inappropriate financial investments, including annuities and reverse mortgages, by unscrupulous agents and scam artists. In response, Chief Financial Officer Alex Sink has created the Safeguard our Seniors (SOS) Task Force to develop solutions to better protect Florida seniors from falling victim to financial fraud. For more information visit www.flseniors.net.
Floridians who believe they may have been victims of annuity fraud should call 1-877-MY-FL-CFO (1-877-693-5236) or log on to www.MyFloridaCFO.com to file a complaint.