Contact: AJ Freeney-Ruiz
Indianapolis, IN - Indiana Secretary of State Todd Rokita commended the Indiana General Assembly for passing a new law allowing the Secretary of State's office to better address problematic selling practices related to variable annuities.
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.
Proposed by Secretary Rokita, the language authored by Representative Luke Messer prohibits certain recommendations to senior consumers concerning these annuities and provides for enforcement through the Department of Insurance with assistance from the Secretary of State's office. The reform was prompted by complaints from elderly Hoosiers who had been caught up in financial scams related to annuities.
The new law, found in Senate Enrolled Act 634, is the result of efforts by the Rokita's office, the insurance and securities industries, and the Indiana Department of Insurance. It adds to the Unfair Trade Practices Act unsuitability in the area of offers for variable annuities to seniors. Unsuitability refers to a product that is not appropriate for a particular investor for various reasons. Under the new law, the Secretary of State's office may now provide services to assist the Department of Insurance in enforcing violations.
"This new law helps protect Hoosier investors, particularly our senior citizens who fall victim to unsuitable investments," Rokita said. "Since my office has the expertise and the resources to investigate complaints, the Department of Insurance may now turn to us for assistance with investigations as we work to protect our seniors."