"Variable insurance products have always been subject to the suitability, disclosure and other requirements that apply to all securities," said NASD Chairman and CEO Robert R. Glauber. "But given the examination findings, the large number of enforcement cases over the past couple of years and the complexity of these products, we feel we can best protect investors by establishing stronger, more specific rules that apply specifically to variable annuities."
Investors can also protect themselves by asking questions — and demanding answers — before they purchase any investment product, including a variable insurance product. These questions include:
- Might I need this money in the short-term?
- Do I have enough money right now to purchase this product?
- What am I paying for each feature? And are the extra fees worth it for me?
These tips and more appear in the SEC's latest investor education publication, Variable Annuities and Variable Life Products: Questions to Ask at http://www.sec.gov/investor/pubs/varaquestions.htm. For more information about variable annuities, investors should read Variable Annuities: What You Should Know at http://www.sec.gov/investor/pubs/varannty.htm.
NASD has issued alerts to both firms and investors to help ensure that variable annuity and variable life insurance products are properly sold. Investors interested in these products should see: Variable Annuities: Beyond the Hard Sell at www.nasd.com/Investor/Alerts?alert_variable_annuities.htm; Should You Exchange Your Variable Annuity? at www.nasd.com/Investor/Alerts/alert_annuityexchanges.htm, and Should You Exchange Your Life Insurance Policy? at www.nasd.com/Investor/Alerts/alert_exchange_lifeinsurance.htm.
