The insurance regulator of New York has reportedly commenced investigation on the sales of indexed universal life insurance products in the US.
A letter that was reviewed by Reuters reported that nearly 134 insurers were issued a document by New York financial services department superintendent Benjamin Lawsky earlier this month.
The insurers were asked to provide details about the marketing of life insurance policies connected to stock market indices, such as the S&P 500.
A person familiar with the matter said that regulatory officials were ‘seriously concerned’ that the illustrations were ‘wildly inaccurate’, and could have a serious impact on the clients.
Breadwinners’ Insurance founder Brian Fechtel was quoted by the publication as saying that he observed profound problems with the selling of cash value life insurance.
These policies are tax efficient and will also protect policy holders from market losses, noted Fechtel.
The investigation was first reported by the Wall Street Journal.