ING Implements Suitability Standards for Fixed Annuities in All States Effective April 16, 2007
Kudos to ING for deciding to implement well conceived suitability standards for all fixed annuity sales. With this new policy ING is moving aggressively to assure suitable sales of its annuity products and is even extending the process to jurisdictions where it is not required by law.
ING’s Suitability Profile form assesses the prospective annuity purchaser’s financial objectives, household income, liquidity needs and tax bracket. Importantly, it requires the prospective buyer to verify the percentage of net household worth that would be placed in the annuity. To its credit, ING will perform a deeper review process in cases where the annuity purchase would represent more than 25% of net worth. This is a solid step to help assure that agents do not place too great a percentage of a customer’s assets in a fixed annuity.
ING promises to complete an initial suitability review within two business days of an application being received. Any suitability questions remaining unresolved after 21 days will result in the application being returned to the agent.
In communicating its new suitability rules to its agents, ING stated, “…By implementing these changes,
I believe ING is acting in the best interests of its customers and agents by mandating suitability review for all fixed annuity sales.
Those fixed annuity carriers which have not moved as aggressively as ING has on the issue of suitability run the risk of becoming victims of adverse selection, in my judgment. Proper suitability review will enhance the integrity and sustainability of our business as ING asserts.
©Copyright 2007 David A. Macchia. All rights reserved.