SEC Looking at Variable Annuity Contract Provisions
The Securities and Exchange Commission is worried that life insurance companies are taking advantage of vague language in VA contracts to make substantial changes that could hurt investors. It appears that the most recent example from The Hartford Financial Services Group Inc., is what has set this concern in motion. Hartford began applying a series of new restrictions to existing contracts. The most controversial amendment places investment restrictions on existing account balances for a number of contracts. Certain clients with the Lifetime Income Builder rider will need to switch to a number of more conservative investments. These more conservative options include a number of funds that call for a minimum 40% allocation to fixed income. Clients who don’t respond by Oct. 4 could have their rider terminated. The SEC is expected to establish standards for the full disclosure of all such conflicts in the contracts. To read the full story, please click here.