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The Denver Post reported on September 5, 2006 that two Colorado Springs men agreed to several sanctions imposed by the Colorado Division of Insurance, including a seven year license revocation for Dennis Marlow and a four year suspension following a six month revocation for Joseph D'Altilia.
They sold index annuity contracts to 153 people, many elderly, and many too old to get their money out without having to pay hefty withdrawal charges. This dubious tactic was highlighted in my article entitled Equity Indexed Annuities: Are They Suitable for Anyone?, posted to my blog on June 28, 2006.
Deputy Insurance Commissioner Erin Toll was quoted as saying, "These two guys preyed on the elderly."
Allianz was a main provider of this "product" which was a so-called fixed index annuity, which, according to Toll was one in which purchasers "couldn't realize their investments for 15 years."
According to the Denver Post, the two had sold other annuity products to many of the consumers involved, and then collected commissions while clients were hit with surrender charges when they rolled over into the Allianz product. This tactic was also highlighted in my blog article entitled Equity Indexed Annuities: Are They Suitable for Anyone? Basically, the idea is to take the customer out of one index annuity product and then roll the him or her into another index annuity product, collect another hefty commission, and leave the customer holding the bag with (a) a stiff withdrawal fee (some providers' penalties range from 7% to 25%); (b) a questionable "investment," which also has severe withdrawal restrictions. Copyright 2006 by Robert W. Hutchinson
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