Indexed Annuity Complaints Down Again for 2009
March 15, 2010 by Sheryl J. Moore
For anyone who thinks that indexed annuity complaints are a problem, I’ve got news for you…THEY ARE MINISCULE!
I am very happy to report that indexed annuity complaints were down again for 2009. See data below from the National Association of Insurance Commissioner’s Closed Complaint Database:
TOTAL INDEXED ANNUITY COMPLAINTS FOR 2006: 187
TOTAL INDEXED ANNUITY COMPLAINTS FOR 2007: 235
TOTAL INDEXED ANNUITY COMPLAINTS FOR 2008: 220
TOTAL INDEXED ANNUITY COMPLAINTS FOR 2009: 148
Based on our research, this results in average annual complaints as follows:
AVERAGE INDEXED ANNUITY COMPLAINTS PER COMPANY 2006: 4.35
AVERAGE INDEXED ANNUITY COMPLAINTS PER COMPANY 2007: 4.12
AVERAGE INDEXED ANNUITY COMPLAINTS PER COMPANY 2008: 3.86
AVERAGE INDEXED ANNUITY COMPLAINTS PER COMPANY 2009: 3.29
So, not only have complaints on these products declined annually for the past three years, but the average has declined consistently for the past four years. Certainly, we do strive for 100% customer satisfaction in the insurance market, but I would contend that an average of only 3.29 complaints per company is quite reasonable!
One must also consider how some of these complaints may have been initiated by disgruntled beneficiaries or registered representatives that were angry about losing business to a “safe money place” such as an indexed annuity. Not all complaints are what outsiders perceive them to be.
Interestingly, variable annuity complaints have not experienced the same phenomena as indexed annuities:
TOTAL VARIABLE ANNUITY COMPLAINTS FOR 2006: 150
TOTAL VARIABLE ANNUITY COMPLAINTS FOR 2007: 241
TOTAL VARIABLE ANNUITY COMPLAINTS FOR 2008: 328
TOTAL VARIABLE ANNUITY COMPLAINTS FOR 2009: 280
Based on our research, this results in average annual complaints as follows:
AVERAGE VARIABLE ANNUITY COMPLAINTS PER COMPANY 2006: 6.00
AVERAGE VARIABLE ANNUITY COMPLAINTS PER COMPANY 2007: 5.88
AVERAGE VARIABLE ANNUITY COMPLAINTS PER COMPANY 2008: 7.13
AVERAGE VARIABLE ANNUITY COMPLAINTS PER COMPANY 2009: 7.00
I have to question why the Securities and Exchange Commission (SEC) feels compelled to regulate products which seem to have less consumer complaints than a product they are already regulating? The data seems to support the fact that the individual state insurance commissioners of the NAIC are doing a fine job regulating these products.
Let’s hope that this data is helpful in supporting our claim that indexed annuities should continue to be regulated as fixed insurance products, so that they can continue to provide protection of principal and limited upside potential to millions of Americans!
