Senator Contacts 15 Largest Individual Annuity Companies, Expressing Concern About Broker Incentive Programs and Requesting Information
May 4, 2015

Last week, Sen. Elizabeth Warren (D- MA) wrote the heads of the 15 companies with the highest 2014 U.S. individual annuity sales expressing concern about whether the rewards and incentives offered by the companies to brokers and dealers create a conflict of interest that may result in inadequate advice or disclosure to consumers, as well as the sale of products that may not meet consumers’ needs. In the letter, the Senator stated that she was “concerned” and “troubled” by the incentive system (which she referred to as “kickbacks”) in the annuity industry, before listing numerous examples of such incentives, including luxury vacations, vehicle leases and NFL Super Bowl style rings, among many others.

Sen. Warren has requested that the 15 companies provide her with a list of all incentives awarded to agents, brokers, FMOs or other sellers involved in the annuity business, as well as a copy of company policies for disclosing and describing sales incentives and conflicts of interests to annuity purchasers, by May 11. In a press release announcing the letters, Sen. Warren said that the “questionable practices identified in today’s letters highlight the need for a strong conflict-of-interest rule from the U.S. Department of Labor (DOL) to protect retirees by requiring advisors to act in their clients’ best interests.”

Sen. Warren did not indicate if she will expand her request for information beyond the 15 companies that she already contacted, or if she plans to call for hearings on the matter.

A PDF copy of all 15 letters is available here.

Sen. Warren’s press release concerning said letters is available here.


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