NASD and SEC Hammer Variable Annuity Sales Practices

The NASD and SEC have released a lengthy report examining the many problems associated with the marketing, sale and sales supervision of variable annuities.

Additionally, the NASD has proposed sweeping changes, and seeks to impose specific sales practice and supervisory requirements in Notice to Members 04-45.

The NASD states that certain firms "continue to engage in unacceptable sales and supervision practices regarding these products", including "excessive switching, misleading marketing, failure to disclose material facts, unsuitable sales, inadequate training and supervision of salespeople and deficient supervisory procedures."

Source: NTM 04-45 and Joint SEC/NASD Report