Finra fines Ameritas $180,000 over VA sales

Firm failed to set up systems and adequately supervise representatives, regulator says

Nov 9, 2017 @ 2:33 pm

By InvestmentNews

The Financial Industry Regulatory Authority has censured and fined Ameritas Investment Corp. $180,000 for lapses in the supervision of variable annuity sales.

In a letter of acceptance, waiver and consent, Finra said that between September 2013 and July 2015, Ameritas "failed to establish, maintain and enforce an adequate supervisory system and written supervisory procedures related to the sale of multi-share class variable annuities."

During that time period, Finra said, Ameritas sold 4,075 individual VA contracts, from which the firm earned over $58 million in revenue. Of those VA sales, Ameritas sold 697 L-share contracts, which totaled 17% of its overall VA sales, or about $11 million.

(More: DOL fiduciary rule delay boosts prospects for annuity sales.)

Finra said that L-share contracts typically provide a shorter surrender period, of three to four years, than B-share contracts, which typically have a surrender period of seven years and are the most commonly sold share class in the industry.

Finra said that Ameritas did not provide sufficient guidance to its registered representatives on the features of various available share classes and did not provide them with adequate information to compare share classes to make suitability determinations.

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