Florida already has some of the strictest suitability standards in the nation for annuity sales to senior citizens. Now the Florida Legislature is considering a bill that would extend most of those protections to annuity buyers of all ages.

A bill is being studied in committees in both houses of the Legislature that, if passed, would give Florida residents some of the toughest antifraud laws for fixed and variable annuity sales.

Samuel Miller, executive vice president of the Florida Insurance Council, says he feels the bill has a good chance of passage now because all sides have agreed on the provisions.

Sen. Garrett Richter, sponsor of the bill in the Senate, says that if the law is enacted it will make Florida a leader in providing protections from fraudulent practices by annuities salespeople.

The law governing the sale of variable and fixed annuities to people over 65, known as the Safeguard Our Seniors law, went into effect in January 2011, and the number of complaints about fraudulent practices by sellers has dropped, according to reports within the state.

The law is designed to prevent unscrupulous salespeople from persuading seniors to sell their other investments or use their savings to buy annuities unsuitable for their age or economic status. Sellers violating the law face a fine of up to $75,000.

The pending bill expands the same suitability standards to all buyers. It would also extend the time all buyers have to change their minds about the investment from 14 days to 21 days.

Younger buyers would not have every protection that seniors do, however. Under the current law, annuity companies can only charge seniors surrender fees to cash out their products for up to 10 years. That cap would still apply to seniors, but not to others. The current law also sets surrender fees at a maximum of 10 percent of the annuity for seniors.

Opponents of the new bill were afraid some of the protections given to seniors in particular would be left out in a new draft applying provisions to everyone, but those problems have been resolved, according to Miller.

The bill passed its first committee hearing February 6 by a vote of 11 to zero and has a good chance of being passed and signed into law, Richter says.

The Florida Financial Planning Association, an advocacy group for financial advisors, support the extension of the provisions to all investors, says Charles Fitzgerald, chairman and past president of Florida FPA.

"Anything that helps remove bad actors and protects consumers is a good thing," he says.