Florida CFO to crack down on scams against seniors
Jacksonville Business Journal
February 17, 2009
Florida's chief financial officer has teamed with state lawmakers to push for tougher penalties for agents who defraud senior investors.
At a press conference Tuesday in Tallahassee, state CFO Alex Sink outlined details of legislation, sponsored by Sen. Mike Bennett, R-Bradenton, and Rep. Keith Fitzgerald, D-Sarasota, which would create better disclosures and protections upfront for seniors who invest in annuities.
Sink said the number of complaints from seniors about annuities has grown nearly fourfold in the last three years. Her department has opened 474 investigations on financial fraud involving seniors, with 70 percent related to annuity and life insurance transactions.
"Better financial protections for our growing population of senior residents and tougher consequences for those who defraud our seniors demand our immediate attention,” Sink said in a statement.
An annuity is an insurance contract that offers a guaranteed series of payments over a period of time.
Under the legislation, the act of “twisting,” or submitting fraudulent signatures on an annuity being sold to a senior citizen, would be a third-degree felony.
Other protections under the proposed legislation would:
- Limit the surrender charge period for an annuity sold to a senior consumer to five years and the surrender charge to 5 percent.
- Extend the 'free look' period for the purchase of an annuity by a senior consumer from 14 days to 60 days.
- Authorize the Florida Department of Financial Services to require an agent to make monetary restitution to a senior consumer they've harmed.
- Prohibit the Florida Department of Financial Services from issuing another license to a former licensee who has had his or her license revoked resulting from the solicitation or sale of an insurance product to a senior consumer.
- Require an insurer to provide a cover sheet attached to the policy when an annuity is issued, informing the purchaser about the free look period and about how to contact the insurer and the department if he or she has questions about the annuity.