Prompted by the increased use of annuity illustrations, the Iowa Insurance Division will begin studying those portions of insurers' sales materials used
to show customers how much money they might earn by buying an indexed annuity.
The insurance division's inquiry comes in the wake of a speech by Christopher Cox, chairman of the Securities and Exchange Commission, in which he said federal oversight of the increasingly popular retirement savings products is appropriate in some instances.
Illustrations are charts that sales agents often use to show prospective customers how much a certain amount of money might grow to if a product is held for a specified period of time.
"It's a great sales tool," said Sheryl Moore, president of AnnuitySpecs.com, a Pleasant Hill firm that researches annuities. However, she said there have been problems when independent sales agents produced their own illustrations.
There are currently no specific state guidelines covering illustrations used in annuities; they are considered advertising and can be evaluated using state laws that govern insurance advertising.
