On Dec. 5, NYDFS fined National Integrity $240k for annuities.
- National Integrity Life Insurance Company violation on annuity contract sales.
- Follows NYDFS Dec. 2016 guide on insurer annuity replacements.
Disclosure on Switches
- Violated NY Insurance Regulations 187 and 60, on replacing annuity contracts.
- Immediate annuity provide periodic income payments beginning in 13 months.
- Deferred annuity can earn interest on premium before payment at future date.
- Recommending to replace existing deferred annuity, with immediate annuities
without disclosing income comparison may reduce consumer's lifetime income.
Alleged Violations
- Company recommended replacing existing deferred annuities, with immediate.
- Without disclosing annuitization comparison, with substantial amount of costs.
- From 2011-16, company did not obtain information to determine the suitability.
- On amount of guaranteed income available if an deferred annuity is annuitized.
- Also failed to disclose information so customers could compare payout amount.
- As a result, it issued immediate annuities without full annuitization information.
Settlement
- National Integrity Insurance will pay $240k civil monetary penalty for violations.
- Pay restitution to individual consumers affected by firm's replacement practice.
