New York Moves to Protect Seniors from Abusive Sales

Insurance brokers or agents in New York State who use titles that mislead seniors will face penalties, Insurance Superintendent Eric Dinallo said. Dinallo also warned seniors about abusive sales and marketing practices aimed at them by some insurance agents and brokers.

Possibly misleading titles such as “retirement planner,” “senior advisor,” “certified,” “senior consultant” and others are increasingly used in marketing life insurance and annuity products to seniors, often at “free lunch” investment seminars, where seniors are sometimes exposed to high pressure sales tactics, Dinallo noted.

“Seniors who have worked hard all their lives to create a nest egg should be able to trust the people who handle their money,” Dinallo said. “Seniors should not be misled into thinking a title like ‘retirement planner’ represents special expertise when in fact no such expertise exists. Agents and brokers who have worked hard to earn titles like Chartered Financial Consultant or Certified Life Underwriter that legitimately represent special education and expertise get shortchanged as well. This is misleading and cannot be tolerated.”

The New York State Insurance Department, which recently created a Senior Protection Unit focused on protecting seniors, is taking a number of steps to protect seniors against deleterious sales tactics. These include:

• Issuing an alert to warn consumers about the sales tactics to which seniors are exposed and to arm seniors with the knowledge necessary to protect themselves against these abusive practices.
  
  
• Issuing a bulletin warning insurers, agents and brokers that they will be held accountable for any abusive practices.
  
  
• Imposing penalties on agents and brokers who misrepresent their level of expertise in marketing and sales activities, as well as insurers who allow producers to use misleading designations.

With older adults being the fastest growing segment of investors, many financial services firms and salespeople now make them the focus of sales and marketing activities. State and federal regulators have become increasingly concerned about unscrupulous and abusive sales practices and fraud targeted towards seniors.

Dinallo chairs the National Association of Insurance Commissioners’ Life Insurance and Annuities Committee, which is working with State regulators to warn seniors and discipline brokers and agents.

"Seniors are uniquely vulnerable and deserve special protection," Dinallo said. “This is a first and critical step in protecting them from those in this industry who would exploit them.”