The following was circulated Thursday by the office of Sen. Mark Leno, who represents the 3rd Senate District of California, which includes Marin County and portions of San Francisco and Sonoma counties.
It is hard to believe that some insurance companies and agents would purposefully take advantage of older military veterans for monetary gain. Unfortunately, that is just what is occurring in community centers, nursing homes and assisted living facilities across the state when senior vets are talked into "quick overhauls" of their finances that sometimes have disastrous results.
In an effort to put a stop to this exploitation of our seniors, I have authored Senate Bill 1170, which protects veterans from insurance scams.
The federal Veterans Administration administers the Aid and Attendance Program, a safety net for low-income veterans and their spouses who cannot afford medical supplies or in-home healthcare. Financial predators target high-income veterans and those with significant assets, such as individual retirement accounts, who otherwise would not qualify for this program. They then purport to counsel them on how to move their assets into "safe harbors" such as irrevocable trusts and deferred annuities so they can participate in the program.
Pretending to represent nonprofit veterans' organizations and government agencies that assist veterans, these unscrupulous people advertise "free lunch" seminars to educate seniors about their entitlement to VA benefits. In reality, they are insurance agents who are simply trying to gather financial data in order to sell indemnity products that pay the brokers' high commissions.
The annuities and long-term investments in which the senior veterans are persuaded to invest are often considered inappropriate for older retirees and can cause serious long-term financial harm. For example, the senior veteran may be unable to access his or her funds in an emergency without paying large penalties and may incur significant tax liability for using assets to purchase an insurance product.
SB 1170 helps protect seniors from these deceitful practices by prohibiting the misleading use of words or symbols on advertisements that are similar to those used by legitimate veterans organizations or agencies. The bill also requires disclosure when an educational seminar is given by a person who is not qualified to represent veterans in VA proceedings and when veterans' events are not endorsed or sponsored by the VA, the California Department of Veterans Affairs or other federally recognized organizations. Finally, the bill prohibits insurance agents from delivering legal documents, such as trusts and other estate planning tools.
Senior veterans who served their country with honor deserve to be safeguarded against dishonest scam artists preying on their vulnerability. I believe SB 1170 will help provide the protection they need.
If you are a veteran looking for information on how to qualify for benefits, contact the California Veterans Affairs office by visiting www.cdva.ca.gov or calling (800) 952-5626. You can also get more information from your county's veteran's service office or a federally recognized veteran's organization such as the American Legion, AMVETS, or Vietnam Veterans of America.
Before investing your money, check your adviser's credentials at California's Department of Corporations by visiting www.corp.ca.gov/Laws/CSL/BDIA/Check.asp or calling (415) 972-8565.
If you believe you are a victim of fraud, report it to your local district attorney and to the California Department of Insurance at www.insurance.ca.gov or (800) 927-4357.
If you would like more information about our legislative work, please contact our San Francisco District Office at 415-557-1300 or San Rafael District Office at (415) 479-6612. You may also reach me by email at Senator.Leno@senate.ca.gov or on the web at www.sen.ca.gov/Leno.