Denn Cautions Senior Centers To Be Careful About Financial Presentations

Recent Investigation Of Improper Annuity Sale Leads To Warning That Senior Centers Check Credentials Of Presenters

Dover – Insurance Commissioner Matt Denn is recommending that senior centers around Delaware check the credentials of insurance agents who ask to make financial presentations to seniors.

In March, after an investigation by the Department of Insurance, the National Western Insurance Company refunded a Wilmington couple $264,575 after improperly selling them an annuity, and the insurance agent who sold the product was fined $1,500. The couple had purchased an annuity from insurance agent Michael J. Blundetto of Pennsylvania following a financial presentation he gave at the Masonic Home of Delaware in New Castle.

The couple was in their 80s, with the wife suffering from Alzheimer’s disease. When the husband attempted to withdraw funds from the annuity to pay for his wife’s care, he was told that he would have to pay a 25 percent penalty.

An investigation found that the annuity product sold to the couple was not approved in Delaware and that the agent was not appointed in Pennsylvania by the company whose product he was selling.

“This case highlights for seniors some of the risks of purchasing annuities and other insurance products from an insurance agent they do not know or have other business with,” Commissioner Denn said. “There are certainly many ethical and conscientious insurance agents out there, but there are also some who should not be trusted.”

The letter Commissioner Denn is sending to senior centers suggests that they check to make sure any agent that asks to make a presentation is licensed in Delaware. They can do so online at www.state.de.us/inscom (click on “Insurance Agent Verification & Status”) by entering the agent’s name or by calling 1-800-282-8611.

An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums a consumer has paid. Annuities, especially variable annuities where the consumer’s funds are invested, have been criticized as being bad investments for seniors.