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ABI regulates annuities correspondence

09/26/11

In an effort to encourage retirees to research and choose the best annuity and to encourage life insurance and annuities providers to develop and market more attractive products, the Association of British Insurers recently announced a plan banning the inclusion of annuity application forms in customer correspondence for members, according to Professional Pensions.

Currently, many financial services providers mail an annuity application form to customers who are near their retirement date. About one out of every three customers simply rolls his or her pension over into an annuity with the same provider without doing any research, according to the source.

"The difference between the best and worst annuities is often surprisingly wide, and can result in people losing a quarter of their pension rights," National Association of Pension Funds chief executive Joanne Segars told the news source. "Looking ahead, more work is needed to help people get a better deal when annuitizing small pots. And too many people are baffled by annuities, so the industry must do more to help them understand the choices available."

Recent figures released in an Insured Retirement Institute report note an upturn in U.S. annuities sales in 2011. Sales have increased in the first two quarters year-over-year between 2010 and 2011 by more than 10 percent.

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