By Fredrick P. Niemann, Esq. a Brick Township New Jersey Elder Abuse and Financial Exploitation Attorney
Regulations of Annuity Sales in New Jersey
The obligation to recommend only investments that are suitable for New Jersey’s seniors arises from antifraud provisions of the federal securities laws; New Jersey state consumer protection statutes, and from the rules of self-regulatory organizations. Before a federally licensed broker-dealer may recommend a variable annuity to an investor he or she must carefully assess the investor’s financial status, investment objectives, and other relevant financial information to determine if the product is suitable. More importantly, the broker-dealer must then explain the features and benefits of the variable annuity and clearly articulate why the dealer recommends its purchase.
Insurance agents, who are not federally licensed or bound by the NASD Rules that pertain to brokers-dealers, make misleading marketing claims to sell equity indexed annuities. New Jersey has attempted to curb abuses. New Jersey has statutes and regulations designed to protect seniors from unlawful annuity marketing and sales practices. N.J. Stat. Ann. § 17B:25-20 (West 2005).
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