More Training for Equity Index Annuity Producers in Iowa

Posted by Ray on June 11, 2007 under Main | Be the First to Comment

In response to multiple lawsuits filed by 8 states, with more states likely to follow suit, Iowa’s insurance division has issued a new set of rules for equity index annuity producers. Now, in order to sell EIA products in Iowa the producer will have to complete a class covering suitability and other issues EIA’s may bring to the table. The producer must complete this new class by January 1^st 2008.

This is fairly interesting because the course that the producers have to take will cover the features and benefits available on equity index annuities. It will also cover the basics such as early withdrawals, surrender charges and the advantages and disadvantages of the product.

Now, this sounds like a good idea, but how stupid do you think people who sell equity index annuities are? Producers, generally speaking, know how annuities work and how the benefits work and most know these basic things about EIA’s because most annuities work the same way. The only thing different are that they will, apparently, show producers how certain benefits work.

This is a very weak attempt to say it is not the products that are the problem, but it is the producers that are the problem. I hate EIA products, but even I know there are some good ones out there and I know it is not the agent who is usually at fault, it is the products basic design. If you foresee a problem and you want to nip it in the bud, so to speak, early why not make the insurance carriers deliver a product that is actually user friendly?

Seriously, if I were an EIA producer I would be very upset over these new rules. Why you ask? Simple, every adviser knows continuing education is a joke and you learn very little from it. This is the same thing and it addresses only the agents, not the real problem which is the product itself. This class is another way the state can cover its self and collect more fees from EIA producers and does nothing to address the actual problem.

We know there is a problem in the industry so address it. Get rid of two tiered annuities and ridiculous bonus products and many of the moving parts found in EIA’s. The state insurance supervisor has control over what is approved in his/her state, so fix it that way!