Equity indexed annuities, which provide investors a portion of the markets rise but do not decline in value when the market falls, have become increasingly popular among seniors.
The Securities and Exchange Commission is looking to change that, The Wall Street Journal reports, by shifting oversight of EIAs from the 50 state insurance commissioners to the SEC, and treating them like securities rather than insurance products and permitting only licensed brokersadhering to strict suitability provisionsto sell them.
The SECs main concern is that salespeople have been pressuring older investors, for whom the long lock-up periods may not be suitable, into buying them, at that, without properly explaining fees, surrender charges or other penalties.
It is expected the SEC will require insurance carriers to disclose the fees equity index annuities charge, along with a clear explanation of how they work along with performance.
