What Duty Does An Agent or Advisor Owe You?
The “Best Interest” Standard
We at Evans Law Firm litigate the question of an insurance agent’s duty to consumers, especially when it comes to whole, universal and indexed universal life insurance and/or annuities. As life insurance and annuity lawyers, we follow changes in the case law, legislative and agency initiatives, and internal changes in the industry. In general, the direction is toward more protection for the American public, particularly seniors. We want to keep you informed of the changes. In representation of our clients, we remain committed to holding agents to the highest standards the law and industry regulations impose on them. If you or a loved one has been a victim of a breach of fiduciary duty, securities fraud or financial elder abuse, or find yourself headed toward a FINRA (Financial Industry Regulatory Authority) arbitration in San Francisco County or elsewhere in California, contact the Evans Law Firm securities and financial elder abuse attorneys at (415) 441-8669 and we can help.
Recently, the National Association of Insurance Commissioners (NAIC) proposed a “Suitability and Best Interest Model” for insurance agent/advisor accountability in dealings with consumers. The NAIC is an independent body of State insurance commissioners. Insurance commissioners play a leading role in insurance industry regulation. The NAIC proposal is therefore an important indicator of regulatory direction. In general, the proposed Suitability and Best Interest Model:
- Broadens the scope of agent accountability to include any solicitation, negotiation, recommendation or sale of an annuity.
- Requires the insurance carrier to determine whether a policy is reasonable prior to issuance based on the circumstances known to the carrier at the time the policy is issued.
- Requires the recommendations of products be in the “best interest” of the consumer. “Best interest” is defined as “acting with reasonable diligence, care, skill and prudence in a manner that puts the interest of the consumer first and foremost.”
- Requires additional disclosures to the consumer including disclosure of cash compensation if it exceeds 3% whether in the form of commissions or fees. This is very significant as agents/advisors are increasingly selling fee-based contracts.
- Expands required agent training to include training against financial exploitation of seniors and other vulnerable consumers.
The San Francisco County and California securities and financial elder abuse attorneys at Evans Law Firm applaud the NAIC proposed Model. We represent clients, especially seniors, who are victims of financial exploitation and/or financial elder abuse and litigate the question of the standard of care to be followed by agents and advisors in their dealings with the public.
If you are the victim of wrongdoing by an insurance agent the San Francisco County and California securities and financial elder abuse attorneys at Evans Law Firm can help you hold that agent to the highest standard of conduct the law prescribes. We are fortunate in California in that our State legislature leads the way in protections against unscrupulous agents. This is particularly true for seniors, where the agent’s misconduct may well amount to financial elder abuse. California allows extra damages and mandatory attorneys’ fees in these cases and imposes additional duties and disclosure requirements on agents. For example, your agent must conduct a thorough suitability analysis of any recommendation. This includes a complete look at your financial picture, including your age, your income, other resources, cash reserves, future needs, and debt and liquidity reviews. The law prohibits agents from cross-selling products to you in certain situations, requires an extended free-look period during which you can get out of the contract without penalty, and requires a detailed disclosure of any surrender penalties the recommended investment may contain. All of these measures are meant to protect you. We at Evans Law Firm have experience with all these requirements and know how to represent you when an agent has ignored or short-changed you on any of them in a recommendation or sale of whole, universal or indexed universal life insurance or an annuity.
If you or a loved one has been a victim of a breach of fiduciary duty, life insurance, annuity or securities fraud or financial elder abuse in San Francisco County or anywhere in California or are headed to FINRA Arbitration, contact Ingrid Evans and the other Evans Law Firm securities and financial elder abuse attorneys at (415) 441-8669, or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>. Our attorneys have experience with complex securities cases, arbitrations, and mediations; and complicated financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also handle cases involving physical and financial elder abuse, other types of qui tam and whistleblower cases, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.