New Laws Affecting Annuity Reform and Business Corporations Take Effect

Contact: AJ Freeney-Ruiz

Indianapolis, IN - Indiana Secretary of State Todd Rokita today reminded Hoosiers about new laws proposed by the Secretary's office that are now in effect. One is aimed at protecting seniors who are harmed by unsuitable variable annuity purchases, and one eases requirements to help businesses file business entity reports.

Effective July 1, 2005, Indiana Code 27-4-9 now authorizes the Department of Insurance to use the investigative resources of the Secretary of State's Office to allow the state to take action against insurance agents who prey on consumers sixty-five years of age or older and recommend variable annuities that may be inappropriate or unsuitable for the particular investor.

A variable annuity is a tax-deferred investment vehicle that comes with an insurance contract and is usually designed to protect an individual from a loss in capital. Earnings inside the annuity grow tax-deferred, and the account is not subject to annual contribution limits like those on other tax-favored vehicles like IRAs and 401(k)s.

The new law is the first step in a growing relationship between the Department of Insurance and the Secretary of State's Office, and beginning this summer representatives of both offices will meet regularly to discuss pending cases and other opportunities to work together in order to heighten consumer protection.

Also effective July 1 is a provision in Indiana Code 23-1-18-1 which now allows a registered agent, certified public accountant, or attorney employed by the business to sign and file the business entity report; prior to this new law only corporate officers could sign. The new law is designed to facilitate business owners using the Secretary of State's online entity report filling option by expanding the list of individuals authorized to sign the reports.

A business entity report, which provides up-to-date information about a business, must be filed every year for non-profit businesses and every two years for for-profit businesses. The Secretary of State's online system allows customers to quickly and easily file their reports online, which is more cost effective and efficient for the state as well as for the customer than filing via paper. Between ten thousand and twelve thousand reports are due each month.