Prospecting for victims


Sales seminars involving meals are often targeted by regulators as insidious lures for annuity “victims.”

In fact, a seminar is the first setting of a video produced by the California Department of Insurance warning seniors about annuity “scammers.” If you haven’t seen it already, it’s quite the treat. The actor playing the evil, shifty-eyed annuity agent may as well be rubbing his hands together as he chortles a villainous “nyah-nyah-nyaaaaaaaah!” Although he doesn’t sport a twirly mustache, he does have long hair verging on debauchery. Perhaps that’s the new waxed whiskers signifying bad guys.

The video came to light when we looked into the state’s Life and Annuity Consumer Protection Program, which pays counties to prosecute life insurance and annuity agents. The program also finances consumer protection efforts such as the video. It is funded by a $1 fee on all insurance transactions.

Agents and annuities don’t fare too well in quite a bit of this material. In fact, anybody in the market for retirement funding options who saw this video would have to be a bit apprehensive about buying an annuity.

And what does the state do with the video? Well, it prospects for “victims,” of course. The Riverside County district attorney, which accused former agent Alan S. Lewis of embezzlement, grand theft and burglary in annuity sales, uses the video in outreach seminars with seniors to warn them about annuity scams. In its request for funding from the state program, the DA cited using the video, “As we do at all outreach sessions with audio/video capability, we were able to show the Annuities — It’s Your Choice video provided to us by CDI, and the attendees seemed to learn from and enjoy the video.”

The prosecutors indicated in the paperwork that they expected to find more victims through the seminars. That prospect has many agents worried in California because that means they will always be vulnerable to prosecution.

In any of these sessions, attendees can approach either the prosecutor or state insurance department investigator conducting the seminar and say that they did not fully understand the annuity that they bought. Can all agents say that each of their clients fully understood every aspect of the annuity they bought?

Suppose that client now has dementia and has no idea why he or she bought that annuity 10 years ago? “A decade ago?,” an agent might say, “but my client was fine then and what about the statute of limitations!”

Indeed, the statute of limitations for some felonies is three years in California. But that clock starts when authorities become aware of the “crime.” So, that’s forever.

California’s insurance department will not comment on the Lewis case, so we don’t know what precipitated that investigation. All Lewis knows is he has been yanked out of his life and thrown into jail for four months as his case moves through the court system.

Who’s next in the victim funnel?






Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. Connect with Steve →

  • The Ethical Advisor

    It’s amazing how many agents don’t get it — if you want to have a long career and avoid trouble, don’t sell bullshit incomprehensible high-fee indexed annuities!

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