! NBC Caught Lying, Again - InsuranceNewsNet Responds to Flaws in Dateline Report
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InsuranceNewsNet Responds to Flaws in Dateline NBC Report
Thursday April 17, 2008
HARRISBURG, Pa.--(BUSINESS WIRE)--In response to the April 13 edition of
Dateline NBC ("Tricks of the Trade"), InsuranceNewsNet.com, a leading online
news source for insurance professionals, found the story to be misleading to
viewers and issued the following statement:
Dear Dateline:
While we agree that there are a few insurance agents practicing deceptive,
unscrupulous sales practices with "Equity Indexed Annuities," there were far
too many important facts about annuities as a whole that were left
unexplained to the viewers.
At the heart of the matter is your show's completely biased, one-sided view
of the facts, from two of the biggest opponents of what are now called
Indexed Annuities (IAs) - never once did Chris Hansen provide an opposing
viewpoint in support of IAs.
Your primary objection to IAs was surrender charges, yet you neglected to
mention that IAs are not the only type of annuity with surrender charges.
What about traditional fixed and variable annuities, some of which contain
similar lengths of surrender periods? No mention of these products was
included in the program. Dateline also failed to mention that there are
plenty of IAs on the market today that contain surrender charges as little
as one year, yet instead focused on a 16-year surrender charge product that
even contained a 10% premium bonus, an important benefit to the client.
The fact is that the amount of complaints against indexed annuity agents and
providers was grossly exaggerated in your program. Attorney General Lori
Swanson's comments that these unscrupulous sales are happening on a large
scale is unsubstantiated. According to the National Association of Insurance
Commissioners, whose mission is to protect the public interest, there have
been only 35 complaints nationally in 2008 compared to more than 1200
complaints against the handling of other life insurance policies. IAs had
very few complaints - according to the NAIC. The point is that Dateline,
like other mainstream media, has blown the situation out of proportion to
the detriment of your viewers.
Like any other sales field, there will be any number of salespeople pulling
the wool over people's eyes. As a leading authority on life and annuity
news, INN strongly opposes fraudulent sales tactics. But by exposing these
few agents, without letting the public know that indexed annuities have one
of the smallest complaint ratios in the insurance industry is just
plain-old, bad reporting. Even one factual tidbit would have made this
Dateline episode gain credibility.
In response to AG Lori Swanson condemning the practices of agents in the
video, it should be stated that Swanson is part of a state system that
approves the very same product which she is condemning.
The documented truth is that for thousands of consumers, indexed annuities
are a perfectly sound, secure and successful vehicle. In the end, your story
could do more harm than good because many owners of indexed annuities may
start to wonder about the strength of their insurance product. Meanwhile,
the financial markets continue to be volatile. Stocks and mutual funds
continue to suffer and yet the insurance industry is being pegged for
squeezing money out of the pockets of seniors. What about the stocks and
fund investment losses that seniors experience on a daily basis?
Here are some additional facts that are important for your viewers to
understand:
-- In 2005, there was only one complaint for every $260,000,000 in premium,
or .1% of all premium (Source: NAIC closed complaint files 2006, Advantage
Compendium).
-- According to NAFA, the NAIC Suitability Model Act, which protects
consumers through rigorous standards, has been enacted in states with
approximately 87% of all annuity business. Carriers are heavily monitoring
and reviewing indexed annuity sales as a result.
-- Isn't the fact that Dateline colluded with the Alabama State Securities
Regulators to get false licenses issued unethical? This report was not a
government-sanctioned piece.
Again, INN agrees that as with all industries, fraudulent sales practices
certainly occur, but in the grand scope of all annuity sales, IA complaints
are among the fewest. The benefits of indexed annuities and the growth
potential and security they offer policyholders were never addressed.
Dateline has revealed itself to be tabloid journalism, not balanced
investigative reporting. In the future, INN, in its humble opinion,
recommends that Dateline provide various viewpoints. In the end, your show
did exactly what it decried in the actions of the agents. It ended up
pulling the wool over its viewer's eyes. Now who is deceptive?
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Contact:
InsuranceNewsNet.com
Rob Billingham, Editor
866-707-6786, ext. 818
r...@insurancenewsnet.com
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Source: InsuranceNewsNet.com