The Colorado Division of Insurance reached settlements with two men it alleges sold annuity products to seniors too old to get their money out without paying hefty charges.
Joseph D’Altilia and Dennis Marlow, both from the Colorado Springs area, sold the Allianz MasterDex 10 fixed index annuity to 153 individuals, many of them unlikely to outlive surrender charges they faced if they needed the money early, the division said.
Purchasers of the fixed-index annuity product “couldn’t realize their investments for 15 years,” said Erin Toll, deputy insurance commissioner.
The division calculated the average age of those buying the Allianz product at 72, with several clients age 80 or older.
“These two guys preyed on the elderly,” she said.
D’Altilia and Marlow had sold other annuity products to many of the consumers involved. The two collected commissions while clients were hit with surrender charges when they rolled over into the Allianz product.
Fixed-index annuities represent a hybrid between variable annuities, which move up and down with the stock and bond markets, and fixed annuities, which promise a set rate of return. They typically carry surrender charges for a longer period of time than more-traditional products.
D’Altilia and Marlow neither admitted nor denied any wrongdoing, but agreed to several sanctions.
D’Altilia agreed to a six-month revocation of his insurance-producer license, followed by a four-year suspension.
Should he violate the agreement, the division will assess the $100,000 civil penalty it stayed.
Marlow agreed to a seven-year revocation of his license and to inform the division of any future commission-splitting arrangements with licensed agents.
He agreed to not accept more than 50 percent on commission-splitting arrangements and provide more disclosure to customers.
Toll said the division plans to take insurance giant Allianz, the provider of the annuities, to task to show why its product is appropriate for seniors.
The Post was not able to reach Allianz or Marlow. D’Altilia declined comment.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
