California Insurance Commissioner John Garamendi announced 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 California. The funds are generated by a $1 fee assessed on all new individual life and annuity products valued at more than $15,000 sold to California residents beginning Jan. 1, 2005.
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.
The Investigation Division maintains regional offices throughout California to respond to reports of suspected violations. Consumers with questions or wishing to report suspected violations can contact the Department of Insurance, Consumer Service Information/Complaint number at: (800) 927-4357.
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