West Virginia Annuity News

In California, Awards Granted For The Life And Annuity Consumer Protection Program

SACRAMENTO – Insurance Commissioner John Garamendi announced today a total award of $500,000 in consumer protection grants to four District Attorneys’ Offices for the Life and Annuity Consumer Protection Program (LACPP).

The LACPP implements AB 2316, which became effective in January 2005. It establishes a fund to be used exclusively for the protection of consumers who purchase life insurance and annuity products in the State of California. The funds are generated by a $1 fee assessed on all new individual life and annuity products valued over $15,000 sold to California residents beginning January 1, 2005.

“Preying on the most vulnerable members of our society is simply reprehensible,” said Commissioner Garamendi. “This new life and annuity funding will help to protect consumers from unscrupulous agents and others who seek to steal the hard earned savings of senior Californians. I urge the recipients of these funds to direct all possible resources toward protecting these valued members of our society.”

The funds collected are for use by both county District Attorneys (DA) and the Department of Insurance for outreach, education, investigation and prosecution. Not every county that applied received funds; these counties submitted excellent applications and have relatively high populations of seniors – the group most often victimized by life and annuity fraud. The following county DA offices were awarded one-year grants that are renewable upon meeting program reporting requirements with positive results:

• Los Angeles County: $200,000
• Riverside County: $100,000
• San Francisco County: $50,000
• San Diego County: $150,000

Contingent upon an increase in revenue collection from insurers, a new request for proposals may be issued next fiscal year to allow those counties that did not receive grants to apply next year.

In addition, the assessments funded public service announcements on annuity fraud and five new investigator positions within the Department’s Investigation Division that will enhance the forces in the fight against life and annuity fraud.

Some insurers failed to complete the required reporting of life and annuity sales, resulting in a smaller pool of funds for the program. The Department will work to ensure that all funds are reported in coming years. Insurers who conscientiously reported and paid their assessments on time are to be commended for doing their part to help make this a successful program.

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	Did You Know?
	Employee Retirement Income Security Act (ERISA) The federal law that establishes the basic requirements for employee benefit plans. The authority for administering and enforcing ERISA is divided among three federal agencies: The Internal Revenue Service (IRS), the Department of Labor (DOL), and the Pension Benefit Guaranty Corporation (PBGC).