Interesting article in the WSJ...

Last month, Glenn Neasham, an independent insurance agent, was ordered to spend 90 days in jail on a felony-theft conviction for selling a complex annuity to an 83-year-old woman who prosecutors alleged had shown signs of dementia.

The agent's conviction, by a state-court jury in Lake County, Calif., is sending shivers down the spines of Mr. Neasham's peers across the country. They can't recall another case where an agent was sent behind bars for selling an annuity.

...

The case underlines authorities' continuing discomfort with "indexed" annuities, savings products that pay interest tied to the performance of stock- and bond-market indexes. Insurers guarantee that buyers won't lose any of their principal but in return charge sometimes-steep penalties if investors withdraw their money early, for periods that can stretch beyond a decade.

<div class="insetContent embedType-image imageFormat-arbitrary"><div class="insetTree" style="width: 225px;"><div class="insettipUnit" style="width: 225px;"> </div></div></div><p>Indexed annuities are attractive to

agents because of the high commissions they receive from insurers, which
can be 12% or more of the invested amount.

…

Lake County Senior Deputy District Attorney Rachel Abelson said in a
court filing there was "sufficient evidence presented [at trial] to show
that Fran Schuber was not capable of consenting to the transaction in
question and evidence showed that [Mr. Neasham] knew that at the time."
In an interview, Ms. Abelson said a $14,000, or 8%, commission “played
into his criminal intent.”

http://online.wsj.com/article/SB10001424052702303863404577288480158320286.html?mod=WSJ_hp_LEFTWhatsNewsCollection