Mesa Annuity Fraud Attorney

An equity indexed annuity is similar to a variable annuity which is sold and registered as a security in accordance with federal law and can only be marketed and sold through sales personnel who are licensed and registered to sell securities. A key distinction, however, is that an equity indexed annuity is not a registered security, but instead is an insurance product which invests only in bonds and in the issuing company’s general account, enabling its issuers and agent to market and sell it without registration, regulation or qualification under securities laws.

Agents are recruited from all walks of life with the assurance of making high commissions and that they do not need to be registered to sell securities. They merely need to qualify to sell life insurance in the state in which they reside and work. New agents are not adequately screened and sales tactics are not monitored. In fact, the minimal training they routinely receive by or on behalf of the issuing company focuses on how to target and sell to seniors regardless of the lack of suitability. Details of the product are virtually ignored even though the product is complex and the issuing companies know that it is complex. While the insurance agents have a duty to inform themselves regarding the products they are selling, insurers know that agents neglect this duty and insurers exploit such breach so that the agent becomes a mere conduit of misinformation. The unfortunate result is that the customers cannot be sufficiently informed about what they are purchasing. Thus, they “ask no questions” and completely trust the selling agent.

The standardized sales process for an equity indexed annuity involves an agent meeting with an elderly prospective purchaser, establishing a relationship of trust and confidence, then giving an incomplete and misleading description about the product. As an incentive to enlist a network of agents, the issuing company offers high commissions which are not disclosed to the prospective purchasers at the time of sale. By offering strong financial incentives to maximize sales, issuing companies foster the use of high pressure and deceptive sales tactics, creating an environment in which the agents are effectively encouraged to do whatever is necessary to make a sale.

If you have been victimized by an unscrupulous insurance agent, call attorney Jared Everton, Arizona annuity fraud attorney, to discuss a strategy to have your money returned to you.