Mo. Insurance Dept. Says Proposal Will Strengthen Consumer Safeguards

Missouri Senate Bill 895, which will strengthen consumer protection in insurance sales, was voted out of a Senate committee with a 9-0 vote, according to a written statement issued by Missouri Department of Insurance.

In its release the insurance department said that in 2006, the oldest of the baby boomers, the generation born between 1946 and 1964, will turn 60 years old, facing pre-retirement decisions. Every day 10,000 baby boomers turn 50 and in the next 10 years, 43 percent of the workforce will be eligible to join millions of other retired Americans.

With increasingly complex retirement products being introduced to the market, consumers facing complex retirement decisions deserve effective protection from our state government, and all individual and business taxpayers deserve efficient regulation, the statement read.

SB 895, was sponsored by Sen. Kevin Engler of Farmington, Mo. If SB 895 becomes law, the Department of Insurance will:

Implement disclosure and suitability rules that will guide financial professionals and protect consumers in the sale of annuities and life insurance products.

Be able to implement a prompt, responsive enforcement policy that responds quickly to stop unlawful conduct in the sale of all insurance products, reducing the harm to consumers.

Have authority to obtain court orders requiring wrongdoers to surrender profits from illegal activity and pay restitution to consumers, including fraudulent conduct in the sale of annuities.

Be able to order wrongdoers to cover the cost of being investigated and prosecuted.

Obtain meaningful civil penalties for fraudulent sales practices in the selling of annuities and life insurance products:

The proposal also raises the current level of $100 to a fine of up to $20,000 per violation, with a maximum penalty of up to $1 million for multiple violations. If the fraud causes a financial loss to the consumer, penalties of up to $1 million per violation with no limit for multiple violations. The bill would give the department authority to take action against other individuals who “materially aid” in violations and give authority to ask a court to order wrongdoers to pay money for Consumer Education programs.

“Our department works diligently every day to protect Missouri consumers from unfair and incompetent insurance practices,” said Dale Finke, director of the Missouri Department of Insurance. “If this bill passes, we will receive the authority we need to effectively protect consumers and efficiently regulate the insurance industry.”

The bill will now be placed on the perfection calendar to be taken up for debate before the full Senate.

Source: Missouri Department of Insurance