05-R 128

2005 -- H 5587 AS AMENDED

Enacted 03/16/05

H O U S E R E S O L U T I O N

RESPECTFULLY REQUESTING THAT THE DIRECTOR OF BUSINESS REGULATIONS

INVESTIGATE AND AUDIT BROKERAGE FIRMS AND BANKS THAT OFFER

VARIABLE ANNUITIES

Introduced By: Representative Matthew J. McHugh

Date Introduced: February 16, 2005

     WHEREAS, Variable annuities are insurance contracts that provide payments to holders

and the value of which fluctuates with the performance of underlying investments; and

     WHEREAS, These annuities often carry high surrender charges and often significant up-

front fees. They are designed to be long-term investments and are considered unsuitable for

investors looking to protect their principal; and

     WHEREAS, Some companies that sell these kinds of annuity plans target the elderly, a

population annuity plans are frequently unsuitable for, given the circumstances of their lives; and

     WHEREAS, It is imperative in Rhode Island that we do all we can to protect our senior

citizens. Therefore, it would be prudent for the Department of Business Regulations to investigate

and audit insurance brokerage firms and banks that offer variable annuities in order to investigate

the suitability of the investments and the honesty of the sales practices, and to ensure that these

firms are not misrepresenting to the elderly and other vulnerable people what they are actually

selling; now, therefore be it

     RESOLVED, That this House of Representatives of the State of Rhode Island and

Providence Plantations respectfully requests that the Director of Business Regulations investigate

and audit brokerage firms and banks that offer variable annuities; and be it further

     RESOLVED, That the Secretary of State be and he hereby is authorized and directed to

transmit duly certified copy of this resolution to the Director of the Department of Business

Regulations.

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LC02379

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