Financial Services Industry
Industry: Email Alert RSS FeedEquity index annuity insurers are facing more lawsuits; Incentive-laden production contracts are blamed.(News)
Investment News, May, 2007
Byline: Gary S. Mogel NEW YORK - New accusations against equity index annuity sellers may lead to regulatory grief comparable to what property-casualty firms suffered during the contingent- commission scandal a couple of years ago, industry observers say. "Production contracts that EIA insurers make their sales force sign are behind the current problems on the fixed-annuity side of the insurance industry,'' said Pasquale Sacchetta, president of Continental Five Insurance Group Inc.
in Westport, Conn. Because the contracts are loaded with incentives to push products of certain insurers, producers' livelihoods depend on placing production goals over the clients' best interests, he added. Late last month, Minnesota Attorney General Lori Swanson...
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