InsuranceNewsNet Responds to Flaws in Dateline NBC Report

--Attack on "Equity-Indexed Annuities" is Biased, Tabloid
Journalism--
HARRISBURG, Pa.--(Business Wire)--
In response to the April 13 edition of Dateline NBC ("Tricks of
the Trade"), InsuranceNewsNet.com, a leading online news source for
insurance professionals, found the story to be misleading to viewers
and issued the following statement:

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Dear Dateline:

While we agree that there are a few insurance agents practicing
deceptive, unscrupulous sales practices with "Equity Indexed
Annuities," there were far too many important facts about
annuities as a whole that were left unexplained to the viewers.

At the heart of the matter is your show's completely biased, one-
sided view of the facts, from two of the biggest opponents of what
are now called Indexed Annuities (IAs) - never once did Chris
Hansen provide an opposing viewpoint in support of IAs.

Your primary objection to IAs was surrender charges, yet you
neglected to mention that IAs are not the only type of annuity
with surrender charges. What about traditional fixed and variable
annuities, some of which contain similar lengths of surrender
periods? No mention of these products was included in the program.
Dateline also failed to mention that there are plenty of IAs on
the market today that contain surrender charges as little as one
year, yet instead focused on a 16-year surrender charge product
that even contained a 10% premium bonus, an important benefit to
the client.

The fact is that the amount of complaints against indexed annuity
agents and providers was grossly exaggerated in your program.
Attorney General Lori Swanson's comments that these unscrupulous
sales are happening on a large scale is unsubstantiated. According
to the National Association of Insurance Commissioners, whose
mission is to protect the public interest, there have been only 35
complaints nationally in 2008 compared to more than 1200
complaints against the handling of other life insurance policies.
IAs had very few complaints - according to the NAIC. The point is
that Dateline, like other mainstream media, has blown the
situation out of proportion to the detriment of your viewers.

Like any other sales field, there will be any number of salespeople
pulling the wool over people's eyes. As a leading authority on
life and annuity news, INN strongly opposes fraudulent sales
tactics. But by exposing these few agents, without letting the
public know that indexed annuities have one of the smallest
complaint ratios in the insurance industry is just plain-old, bad
reporting. Even one factual tidbit would have made this Dateline
episode gain credibility.

In response to AG Lori Swanson condemning the practices of agents
in the video, it should be stated that Swanson is part of a state
system that approves the very same product which she is
condemning.

The documented truth is that for thousands of consumers, indexed
annuities are a perfectly sound, secure and successful vehicle. In
the end, your story could do more harm than good because many
owners of indexed annuities may start to wonder about the strength
of their insurance product. Meanwhile, the financial markets
continue to be volatile. Stocks and mutual funds continue to
suffer and yet the insurance industry is being pegged for
squeezing money out of the pockets of seniors. What about the
stocks and fund investment losses that seniors experience on a
daily basis?

Here are some additional facts that are important for your viewers
to understand:

-- In 2005, there was only one complaint for every $260,000,000 in
premium, or .1% of all premium (Source: NAIC closed complaint
files 2006, Advantage Compendium).
-- According to NAFA, the NAIC Suitability Model Act, which
protects consumers through rigorous standards, has been enacted in
states with approximately 87% of all annuity business. Carriers
are heavily monitoring and reviewing indexed annuity sales as a
result.
-- Isn't the fact that Dateline colluded with the Alabama State
Securities Regulators to get false licenses issued unethical? This
report was not a government-sanctioned piece.

Again, INN agrees that as with all industries, fraudulent sales
practices certainly occur, but in the grand scope of all annuity
sales, IA complaints are among the fewest. The benefits of indexed
annuities and the growth potential and security they offer
policyholders were never addressed.

Dateline has revealed itself to be tabloid journalism, not balanced
investigative reporting. In the future, INN, in its humble
opinion, recommends that Dateline provide various viewpoints. In
the end, your show did exactly what it decried in the actions of
the agents. It ended up pulling the wool over its viewer's eyes.
Now who is deceptive?
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InsuranceNewsNet.com
Rob Billingham, Editor
866-707-6786, ext. 818
rob@insurancenewsnet.com

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