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More Help Info
Filing a Complaint About the Inappropriate Sale of an Annuity
Additional Comments
| Subject |
Comments |
| NASD and SEC |
The NASD and SEC will follow up on complaints against
salespeople, reps, and brokers selling securities.
Most annuities, including fixed annuities, contain subaccounts with
securities in them. But there are some fixed annuities in which the entire
investment is in the insurance company's general account - and these are
not under the jurisdiction of the NASD and SEC. These agencies have
authority to suspend or revoke an individual or firm's securities license.
NASD's Southern California office will take telephone complaints, to be
followed by a written form. If the complainant wants his/her money back in
addition to having a broker sanctioned, he will likely need to go through
an arbitration process. |
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| Complaints by Telephone |
Telephone inquiries and complaints are accepted by some
agencies, but these agencies later ask that the complaint be made in
writing. Be sure to keep a record of pertinent facts, dates, amounts
invested, people talked to, etc. |
| Filing Complaints with Multiple Agencies |
At least for starters, filing complaints with more than two
agencies for the same transaction is probably not effective. If the
regulatory agencies become aware that complaints have been filed with
multiple agencies for the same transaction, they will usually determine
which is the appropriate lead agency for the investigation and follow-up. |
| Will Filing a Complaint Make a Difference? |
After reading on the states' web sites the various
disclaimers as to the steps these states can take as a result of
complaints they receive, it seems that in many cases complaints about
unsuitable annuity sales will not result in sanctions.
Still, the complaint process may in a more indirect way impact a
company - since each state tracks and publicizes the number of complaints
lodged against a company, including those where no action was taken. The
National Association of Insurance Commissioners (NAIC) and many states
post the number of complaints and the complaint ratio (# of complaints/#
of contracts) for each company doing business in the state.
If a consumer informs a company that he/she was going to file a
complaint with the state, it might prompt the insurer to look closely at
what was done and perhaps undo it. |
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July 2004
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