Justice Launches Antitrust Inquiry into Insurance Industry
WASHINGTON (AP) _ The Justice Department is investigating whether the insurance industry has tried to restrict competition in the sale of annuities, a department official said Friday.
``We have begun looking into the possibility of anti-competitive practices in the insurance industry as it relates to annuities,″ said Gina Talamona, spokeswoman for the department’s antitrust division. She would not provide further details.
The department is studying whether the insurance industry, through its trade organization, the American Council of Life Insurance, is improperly trying to persuade state insurance regulators to prevent banks from issuing annuities that would be backed by federal deposit insurance, The New York Times reported.
Insurance companies offer annuities as a retirement investment, with tax advantages, that promises to pay specified amounts to the investor in later years. Federal deposit insurance would be an added advantage to the product.
The investigation arose from a complaint by American Deposit Corp. of Denver, which helps banks issue annuities, the Times said. American Deposit’s president Rick Fasold said three banks now issue annuities and eight others are planning to, according to the Times.