Washington, D.C. (April 14, 2008) — The American Council of Life Insurers (ACLI), whose member companies account for 94 percent of annuity premiums, abhors unethical or inappropriate sales practices. Dateline NBC’s April 13 report of certain sales tactics and training is at odds with the high principles both insurance companies and agents typically maintain in their dealings with customers.

Any consumer who feels he or she has been misled in the sales process should contact their insurance company directly. If concerns are not addressed, the assistance of the state insurance department should be enlisted.

Life insurers’ commitment to high, ethical standards is well established – and ongoing. In recent years, the industry has reinforced this commitment through several specific initiatives.

One example is the industry’s strong support for the adoption and expansion of model suitability regulation in all states. Developed by the National Association of Insurance Commissioners (NAIC), the model requires that an annuity recommendation be based on the consumer’s insurance needs and financial objectives. Originally, this model applied to consumers 65 and older. ACLI advocated for the expansion of the model to include consumers of all ages to ensure everyone receives advice that will help them meet their individual financial goals.

Life insurers are also advocating that all states adopt the NAIC model law on annuity disclosure. This model spells out the information that must be disclosed to annuity customers including an explanation of interest rates and how of if they change, a summary of the options and restrictions for accessing money, and an outline of fees. We believe that consumers are most satisfied when they have all the information they need to make a purchase that is in their best interests.

To emphasize this point, ACLI and NAVA, the Association for Insured Retirement Solutions, have embarked on an initiative to enhance disclosure practices through uniform – and required – standards for annuity disclosure. Supported by the National Association of Insurance and Financial Advisors (NAIFA), the goal of the initiative is to ensure that all annuity consumers receive a summary disclosure document, written in plain English, that outlines features of the annuity, including costs and fees. The information would be presented in a uniform format no matter the company and regardless of the agent or the state of the transaction. Several years in development, the documents were tested and retested with retirees and baby boomers. In addition, ACLI worked with professionals outside of the industry who provided expert advice on readability and presentation during the initiative’s development.

In early February, the industry joined with the Iowa Division of Insurance on a pilot program to test the new disclosure documents with consumers in that state. We expect other state regulators to launch similar programs. Presently limited to fixed and index annuity products, life insurers are working to expand the initiative to include variable annuities. The SEC and FINRA have encouraged the industry's initiative and are reviewing its use.

The purpose behind these efforts is to help future retirees understand and appreciate the unique role that an annuity can play in their retirement security plans. We know that some may not choose an annuity while others will want the peace of mind that an annuity’s lifetime income can provide. No matter what they decide, the industry is committed to providing consumers with the information they need to make the choice that is right—for them.

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The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 353 member companies account for 93 percent of the life insurance industry’s total assets in the United States, 93 percent of life insurance premiums and 94 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at www.acli.com.