For those just tuning in, a quick summary: (now former) California insurance agent Glenn Neasham sold an annuity to an elderly woman. Her family, claiming that she was in fact suffering from Alzheimer's at the time, took umbrage. Mr Neasham, stripped of his license, now sits in jail for felony theft.
The longer version is here and here.
From the first, I've been on the fence regarding this case. For one thing, I fail to see how the "victim" was actually harmed. For another, I fail to see how forwarding a check to an insurance company constitutes "theft." And as much as has been written about this case in the industry media, we still don't have all the facts.
This morning, I came across a terrific analysis of the case written by Sheryl Moore, herself a licensed agent and the grand-daughter of two Alzheimer's patients. She points out several details which, if not disregarded by that media, has seen precious little airtime:
"It is a known fact that the state of California is one of the worst insurance departments to deal with ... they also have a senior-protection law (SB620) that imposes severe penalties for insurance agents selling “unsuitable” annuities to seniors."
Was the indexed annuity product "unsuitable?" We don't know, but it's not a question to be taken lightly.
She notes also that "[t]he bank that held the certificate of deposit [the funding vehicle] ... had discussed with Mr. Neasham their concerns about the prospective annuitant’s decisions, independence and ability to understand the annuity purchase."
This is actually a two-edged sword: the fact that Mr Neasham agreed to accompany Ms Schuber to the bank at all would seem to be a net positive regarding his character and belief that she was, in fact, competent to make the purchase decision.
On the other hand, once he had heard these concerns, perhaps a call to the carrier's compliance department would have been prudent.
I think Ms Moore is a little premature in letting Allianz off the hook. As she (correctly) notes, Mr Neasham represented the carrier, and had a fiduciary duty to it. But it seems to me that this is not a one-way street: the carrier processed the application; as we've been noted, indexed products receive additional scrutiny compared to their fixed-design counterparts.
On the whole, though, I find Ms Moore's analysis to be a refreshing change from the hand-wringing that's characterized this case. Again, my natural sympathies lie with Mr Neasham, and I do believe - based on the facts as we know them - that jail-time was a clear abuse of prosecutorial power. But there is certainly more here than initially met the eye.
The longer version is here and here.
From the first, I've been on the fence regarding this case. For one thing, I fail to see how the "victim" was actually harmed. For another, I fail to see how forwarding a check to an insurance company constitutes "theft." And as much as has been written about this case in the industry media, we still don't have all the facts.
This morning, I came across a terrific analysis of the case written by Sheryl Moore, herself a licensed agent and the grand-daughter of two Alzheimer's patients. She points out several details which, if not disregarded by that media, has seen precious little airtime:
"It is a known fact that the state of California is one of the worst insurance departments to deal with ... they also have a senior-protection law (SB620) that imposes severe penalties for insurance agents selling “unsuitable” annuities to seniors."
Was the indexed annuity product "unsuitable?" We don't know, but it's not a question to be taken lightly.
She notes also that "[t]he bank that held the certificate of deposit [the funding vehicle] ... had discussed with Mr. Neasham their concerns about the prospective annuitant’s decisions, independence and ability to understand the annuity purchase."
This is actually a two-edged sword: the fact that Mr Neasham agreed to accompany Ms Schuber to the bank at all would seem to be a net positive regarding his character and belief that she was, in fact, competent to make the purchase decision.
On the other hand, once he had heard these concerns, perhaps a call to the carrier's compliance department would have been prudent.
I think Ms Moore is a little premature in letting Allianz off the hook. As she (correctly) notes, Mr Neasham represented the carrier, and had a fiduciary duty to it. But it seems to me that this is not a one-way street: the carrier processed the application; as we've been noted, indexed products receive additional scrutiny compared to their fixed-design counterparts.
On the whole, though, I find Ms Moore's analysis to be a refreshing change from the hand-wringing that's characterized this case. Again, my natural sympathies lie with Mr Neasham, and I do believe - based on the facts as we know them - that jail-time was a clear abuse of prosecutorial power. But there is certainly more here than initially met the eye.
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