New York Regulators Send Income Annuity Exchange Warning
September 25, 2019 by Allison Bell
The New York State Department Financial Services has sent life insurers a warning: Issuers have to be as careful about consumer protection when they’re rolling assets from deferred annuities into immediate annuities as they are with other annuity replacement transactions.
The New York department drove that point home today by requiring six insurers to pay a total of $1.1 million in restitution to consumers affected by deferred-annuity-to-immediate-annuity exchanges.
The department will also require the insurers to pay $673,000 in fines, officials said.
The issuer of a deferred annuity takes money in early on, then pays out income years later.
An immediate annuity, or income annuity, typically begins generating a stream of income around the same time it’s purchased.
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