Conseco and a handful of other insurance giants that offer variable annuities have received subpoenas from New York Attorney General Eliot Spitzer, the New York Post reports Friday. Lincoln National and Hartford Financial Services Group are two other companies Spitzers office is investigating for whether they knowingly permitted market timers to move in and out of their VAs.
Sources told sister publication Annuity Market News only two months after Spitzer began his probe that 80 investment and insurance companies are under scrutiny ( see "VAs Under Pressure Over Market Timing," December 2003 AMN).
"This brings in another set of firms," Spitzer told the Post. Added SEC enforcement chief Stephen Cutler: "Were concerned that market timing and/or late trading were permitted in variable annuity products, and thats why weve asked insurance companies for information relating to trading in funds."
While a Conseco spokesman declined comment for todays edition of the Post, Christina Divigard, a spokeswoman for Hartford, told AMN that while her company has procedures in place to prevent market timing, Hartford is nonetheless taking a close look at the situation.
Industry experts advise insurance firms to review their procedures and to make sure they are conducting fair-value pricing in funds with a concentration in thinly traded stocks or fixed income.