Calling for more rigorous protection of seniors against financial fraud, California Insurance Commissioner John Garamendi last week unveiled two new legislative bills to help seniors protect their savings and financial health against crimes by insurance scam artists.
Joined by senior advocates and local officials, Garamendi outlined the measures, which he said will help “put teeth” into the efforts of law enforcement as it battles financial abuse of seniors.
“There are few crimes more heinous than taking advantage of a senior to cheat them out of their life savings,” said Garamendi. “I want to enhance our ability to root out these crimes and make sure that those who are convicted face the toughest penalties possible.”
The bills sponsored by Garamendi are SB 1273 (Scott, D-Pasadena) and AB 2316 (Chan, D-Oakland). Senator Jack Scott’s bill would give District Attorneys the ability to charge suspects with a felony in cases of “twisting” or “churning” of annuities sold to persons 65 and older. In these cases, a scam artist induces a person to purchase an insurance policy, and then encourages them to lapse, forfeit, switch or surrender it, resulting in large commissions to the agent or broker. Current law makes this crime only a misdemeanor.
AB 2316, by Assemblymember Wilma Chan, establishes the “Senior Protection Fund” by assessing up to $1 per each annuity or life insurance product sold in California. This fund will be used for California Department of Insurance (CDI) and local District Attorney fraud investigation activities and education efforts related to seniors. The CDI receives hundreds of complaints each year in which agents/brokers befriend elderly consumers and then commit elder financial abuse.
Living trust mills have also reportedly become increasingly popular schemes to cajole senior citizens into purchasing financial products that may not be beneficial to them. Frequently, these “products” are really intended to allow agents or brokers an additional opportunity to sell senior annuities.
Earlier this year Garamendi and the Department were instrumental in helping push through new legislation (SB 620, Scott, D-Pasadena) to curtail many of the abuses in the area of life insurance and annuity sales to California seniors.
The Commissioner was joined at the event by Palm Springs Mayor Ron Oden; Juan De Lara, the District 4 Coordinator of Riverside County C.A.R.E. (Curtailing Abuse Related to the Elderly) Program; and Virginia D. Eberhard, Ph.D., President of the Mizell Senior Center Board.
Seven important tips for seniors to protect themselves against financial scams:
• Require identification from anyone who either calls or visits a senior in order to make a sales presentation.
• Do not meet with anyone alone in the home. Have a family member, trusted friend or legal representative present.
• Do not feel compelled to purchase anything on the first visit.
• Persons 60 and older have a 30-day FREE LOOK period to return any life insurance or annuity product for a full refund.
• Living trusts are legal documents and should be handled by an attorney or an individual certified by the State Bar of California Board of Legal Specialization.
• To check the license status of any licensed insurance agent, questions about an agent, or to file a complaint, contact the Department of Insurance Consumer Hotline, 1-800-927-HELP (4357) or go to the Department’s Web site www.insurance.ca.gov
• Check the status of any person selling securities by calling the California Department of Corporations, 1-866-275-2677 or at www.corp.ca.gov
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