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The state Department of Insurance has revoked the license of a San Diego-based insurance agent for allegedly attempting to convince elderly clients to surrender existing annuity policies and purchase new ones, it was announced Thursday.
Alan Lucien Cerf, 69, faces more than $49,600 in fines for defrauding seniors, according to Insurance Commissioner Ricardo Lara.
Officials allege Cerf repeatedly convinced clients to give up existing policies and buy new ones ‚ÄĒ a practice known as ‚Äúchurning‚ÄĚ ‚ÄĒ which earned him additional commissions, but cost his clients huge surrender fees. These fees consumed much of the new annuity‚Äôs principal, Lara said.
‚ÄúAgents have a fiduciary responsibility to their clients, and a moral obligation to help those who come to them for assistance, not take advantage of them,‚ÄĚ Lara said. ‚ÄúIt‚Äôs always a good idea for clients to check the status of their agent‚Äôs license and look out for any warning signs that their agent may not be acting in their best financial interest.‚ÄĚ
The agency said that each new annuity issued to Cerf‚Äôs clients had a lower value than the previous one. This practice also extended the maturity date of the annuities, sometimes past the client‚Äôs life expectancy. Additionally, each time Cerf‚Äôs clients surrendered their prior annuities and purchased new ones, Cerf would earn a sizeable commission, according to the department.
An administrative law judge found that Cerf violated the state Insurance Code by recommending that at least three of his clients, who were all over 65 years of age, purchase unnecessary replacement annuities in nine separate transactions, Lara said.
‚ÄďCity News Service
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