New York Fines Insurers Over Deferred Annuity-to-Immediate Annuity Exchanges

The companies have entered into consent orders agreeing to the settlements.

Consumers often use deferred annuities to build up retirement assets. They may then use an annuitization feature in the deferred annuity, or a separate "immediate annuity," or 'income annuity," to convert the assets into a lifetime stream of income.

In the consent orders, the New York department contends that the insurers' producers failed to provide consumers with disclosures that compared the income the consumers could have gotten from the annuitization features in their deferred annuities with the income coming from the replacement contracts.

In addition to agreeing to pay restitution and penalties, the insurers have agreed to put side-by-side monthly income comparison information in their disclosure statements, and to change the disclosure, suitability and training procedures.

Representatives from MassMutual and Pacific Life were not immediately available to comment on the consent orders.

Lincoln said it has no comment and remains committed to complying with all applicable laws and regulations while serving the best interest of its customers.

— Read New York State Growls at Out-of-State Pension Risk Transfer Marketers, on ThinkAdvisor.

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