NYDFS entered into a consent order with Nationwide Life Insurance Company for $5.6 million in penalties and restitution arising from violations alleged to have occurred in connection with the annuity replacement business. According to NYDFS, “DFS’s investigation found that Nationwide failed to properly disclose to consumers income comparisons and suitability information, causing consumers to exchange more financially favorable deferred annuities with immediate annuities. Hundreds of New York consumers – primarily elderly individuals – received incomplete information regarding the replacement annuities, resulting in less income for identical or substantially similar payout options.”
“Today’s settlement is the latest result in DFS’s industry-wide investigation into deferred to immediate annuity replacement practices in New York State. To date, the industry-wide investigation has resulted in settlements with thirteen life insurance companies, totaling approximately $29 million in restitution and penalties.”
The consent order may be found here: https://dfs.ny.gov/reports_and_publications/press_releases/pr202205201