Session 3.4: Market Conduct and Best Practices for Fixed Annuity Sales

Paul McGillivray of Creative Marketing International Corporation moderated this session, which had an interesting format. The format was that McGillivray asked a series of eight questions and asked a pair of panel members to comment on each one. The panel consisted of himself, Fred Cowley (a producer), Nicholas Gerhart of American Equity, and Eric Thomes of Allianz. Each of them is involved in some aspect of the fixed indexed annuity market.

Some interesting observations that came out were:

• There is no central industry database for carriers to report rogue agents, thus these agents are easily able to move from carrier to carrier and from one marketing organization to another.
• California at one point proposed legislation that would declare fixed and fixed indexed annuities to be unsuitable for all consumers age 65 and older.
• Allianz now calls all annuity purchasers who are age 75 or older to confirm that they know they bought an annuity and are aware of how long is the surrender charge.
• One vexing problem for the industry is that many agents simply omit carrier and product names in their advertising, then think they can say whatever they want without carrier approval.

What recent steps have you seen carriers or agencies take to tighten their suitability procedures? How do you think that we as an industry can get the upper hand in the public relations arena?