New York State
Insurance Department

            Superintendent of Insurance Neil D. Levin today announced that the Department has issued Circular Letter #21 which sets forth disclosure guidelines for all licensees who solicit and sell bonus annuity products.

            “Earlier this month the Department approved bonus annuity products for sale in New York State,” said Levin. “Today, we are providing guidance for those who solicit or sell these products to ensure that consumers are given full and fair disclosure."

            The fulfillment of a licensee’s due diligence obligation will be measured, in part, by answers to several relevant questions. Consumers should be made aware of how the bonus and/or credit operates as well as what purchase payments are eligible for the bonus. The consumer should know the duration of additional interest that will be credited to the contract. Consumers should be made aware that the bonus product may have higher surrender charges and/or a longer surrender period than found in non-bonus annuities as well as how the bonus and/or credit works.

            “New York’s consumers should be made aware of all aspects of these products and I recommend that potential buyers ask questions to gain a thorough knowledge of these products. Licensees are reminded that the anti-churning restrictions of Regulation 60 apply and that improper sales activities could result in revocation of licenses,” Levin added.