Colorado Adds 3 Words to “banned” List for Life/Annuity Ads

[Brian Anderson]

Effective July 1, Colorado’s Division of Insurance added the terms “certificate of deposit" or "CD,” “safe” and “secure” to its list of terms banned in life insurance and annuity advertisements. Apparently Colorado is the first state to add these terms to its “banned” list, but many think other states will follow suit.

Amended Regulation 4-1-2
ADVERTISING AND SALES PROMOTION OF LIFE INSURANCE AND ANNUITIES
Section 5 Form and Content of Advertisements
B. No advertisement shall use the terms “investment,” “investment plan,” “founder’s plan,” “charter plan,” “deposit,” “expansion plan,” “profit,” “profits,” “profit sharing,” “interest plan,” “savings,” “savings plan,” “Certificate of Deposit or CD”, “private pension plan,” “retirement plan”, “risk-free”, “safe”, “secure” or other similar terms in connection with a policy in a context or under such circumstances or conditions as to have the capacity or tendency to mislead a purchaser or prospective purchaser of such policy to believe that he or she will receive, or that it is possible that he will receive, something other than a policy or some benefit not available to other persons of the same class and equal expectation of life.

AnnuityNews - Colo. Bans

If other states follow suit, foresee any impact with your marketing?

 

[Norwayguy]

Question in regards to the use of CD is it only in relationship to describing say a MYGA as similiar to a CD or can you not have an ad asking if their CD is offering a rate less than x with no mention of annuities?

 

[scagnt83]

Question in regards to the use of CD is it only in relationship to describing say a MYGA as similiar to a CD or can you not have an ad asking if their CD is offering a rate less than x with no mention of annuities?

Their concern was more about bait and switch. Specifically an agent advertising for CD rates and only having the ability to sell Annuities. But I would guess that your first example would be a no no too.

 

[Norwayguy]

Their concern was more about bait and switch. Specifically an agent advertising for CD rates and only having the ability to sell Annuities. But I would guess that your first example would be a no no too.

That kills the old brokered CD with a great rate but limited to a small amount of money and switch to annuity sale.

 

[scagnt83]

That kills the old brokered CD with a great rate but limited to a small amount of money and switch to annuity sale.

Their big gripe was agents who do not have access to CDs. If you have access to CDs then it would not be bait and switch. Do you have access to CDs other than Indexed CDs?

 

[TwiLight]

I wonder if you are still banned in CO if you offer a Market linked Certificate of Deposit (FDIC Insured) and are also a licensed life agent.

We do that all the time and sell the CD and also annuity if is appropriate for the client. We sell it using Market-Linked CD

 

[scagnt83]

I wonder if you are still banned in CO if you offer a Market linked Certificate of Deposit (FDIC Insured) and are also a licensed life agent.

We do that all the time and sell the CD and also annuity if is appropriate for the client. We sell it using Market-Linked CD

A lot of the MLCDs I have seen actually payout the interest earned instead of it compounding in the account. Is that true for the ones you linked to?

 

[TwiLight]

A lot of the MLCDs I have seen actually payout the interest earned instead of it compounding in the account. Is that true for the ones you linked to?

Usually most of the offerings have an annual interest coupon. Recently we have one that does not pay the interest until maturity.

It offers more of a Guaranteed minimum than ones that do not.

 

[scagnt83]

Usually most of the offerings have an annual interest coupon. Recently we have one that does not pay the interest until maturity.

It offers more of a Guaranteed minimum than ones that do not.

So the interest does not compound year to year, its just paid out to the client each year?

 

[TwiLight]

So the interest does not compound year to year, its just paid out to the client each year?

Yep, just like most CD's