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CFO Sink hails Senate safeguards for seniors

By Staff | May 1, 2009

Earlier this week, Chief Financial Officer Alex Sink commended the Florida Senate for passing her Safeguard Our Seniors legislation sponsored by State Sen. Mike Bennett (SB 1372) and State Rep. Keith Fitzgerald.

The legislation, which was approved unanimously, increases the penalty for unscrupulous agents who defraud senior investors to a third degree felony and establishes better disclosures and protections upfront for seniors who invest in these products.

CFO Sink saw a need for the legislation after her department heard from hundreds of seniors and their families who say they were convinced to liquidate annuities, CDs, stocks and savings accounts to fund new annuities only to discover these actions robbed them of their savings. She created a Safeguard Our Seniors Task Force last fall to examine and recommend solutions to better protect Florida seniors against financial fraud, and this year teamed up with key lawmakers to push legislation that addresses these issues.

“The number of complaints from Florida seniors about annuities has nearly quadrupled in the last three years,” said Sink, whose department has opened nearly 500 administrative cases on financial fraud involving seniors, with approximately 70 percent of cases related to annuity and life insurance transactions. “This legislation offers much-needed financial protections for our growing population of senior residents and tougher consequences for those who defraud our seniors, and I am pleased it passed in the Florida Senate.”

Because the House companion bill filed by Representative Fitzgerald was not heard in committee meetings, the legislation has not passed the House of Representatives and may not become effective Florida law this year. Sink called on the House to take up this important legislation before session ends.

“I commend the Florida Senate for recognizing that our seniors deserve better, but I am very disappointed that the Florida House decided to play politics rather than address this important issue,” said Sink.

Under the legislation, the act of “twisting” an annuity to a senior consumer would be a third degree felony, bringing this violation in line with the penalty currently applied to a securities broker-dealer under Florida law. Other protections under the proposed legislation also:

Limit the surrender charge period for an annuity sold to a senior consumer to 10 years and the surrender charge to 10 percent;

Extend the “free look” period for the purchase of an annuity by a senior consumer from 14 to 30 days;

Authorize the Department to require an agent to make monetary restitution to a senior consumer they’ve harmed;

Prohibit the Department 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 they have questions about the annuity.

The Safeguard Our Seniors Task Force includes representatives from the Department of Veterans’ Affairs, Insurance Consumer Advocate, Offices of Insurance Regulation and Financial Regulation, NAACP, Florida Bar, American Council of Life Insurers, insurance agents and securities broker-dealers.

To learn more about the Safeguard Our Seniors Task Force or what to consider when purchasing annuities, visit www.FLSeniors.net. Senior Floridians who believe they may have been the victim of annuity fraud should call 1-877-My-FL-CFO or log on to www.MyFloridaCFO.com to file a complaint.

As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.

Source: State of Florida