Fla. Announces Legislation to Halt Abusive Sales Practices for Annuities

Florida’s Chief Financial Officer Tom Gallagher announced that he is pursuing a bill to prevent abusive sales practices of annuities sold to seniors.

Ellen Daniels from Tampa agrees something needs to be done. Daniels’ mother, despite being terminally ill, was reportedly convinced to purchase an annuity that was unsuitable. As a result, when extra money was needed for medical bills, the family faced large surrender charges in order to obtain funds from the annuity.

Peter Cantanese, the insurance agent who sold the annuities to the Daniels family, also reportedly churned multiple annuity policies, rolling existing annuities into new policies and costing the family thousands of dollars in surrender charges. Later he allegedly misappropriated $30,000 in additional funds from Daniels’ relatives, for which he was later convicted of Grand Theft. The department is now seeking to revoke his insurance license.

Under the legislation, insurance companies and agents offering annuity products to seniors over the age of 65 would be required to clearly document the basis for selling the product, including consideration of a senior’s financial and tax status, as well as investment objectives.

House Bill 965, sponsored by Representative Dave Murzin, would also give the Department of Financial Services and the Office of Insurance Regulation the authority to take corrective action if a company or agent violated the law. Senator Jeff Atwater is sponsoring the Senate version.

Florida is currently home to more than 2.9 million citizens over the age of 65.