Attorneys Trust Service

Tuesday, March 01, 2005

SB 620 Now Fully In Effect

Senate Bill 620 became law in September 2003, with the final requirements taking effect January 1, 2005. Because this legislation is so important to all licensed insurance professionals, ATS has posted this Bill, along with the warning letter required by the bill, on the "Resources" page of the ATS website. The warning letter can be personalized for your convenience.

Senate Bill 620 requires specific training for life agents before they can sell annuities, usually limits the investment of premiums during a 30-day cancellation period, and "revises" disclosure requirements when selling to seniors — especially in-home sales calls.

Although the bill does not specifically mention living trusts, we are all aware of the recent complaint filed by the Attorney General’s office against Family First Insurance, and numerous articles in local newspapers about "living trust scams." We are reasonably certain that Section 787 of the bill ("Any advertisement or other device designed to produce leads…) includes, as a "device," living trusts. The complaint has long been that "trust mills" sell trusts primarily to discover all the client’s assets, with the goal of selling abusive annuities. To the extent this is true, SB620 is a welcome protection for the public. However, to the extent that agents sell "good" annuities, geared to the beneficial interests of the clients, and fully disclose their identity, services, and desired intent, they have little to fear from SB620. It is not enough, however, to comply with the spirit of this law. Make sure you comply with the letter as well.

If you have not read the bill or prepared your warning letters, we urge you to visit our website and click on the "Support/Library" page to learn more.

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