Gov. Gavin Newsom has signed legislation from Sen. Bill Dodd, D-Napa, in partnership with California Insurance Commissioner Ricardo Lara, that would add consumer protections for people investing in annuities, including many vulnerable seniors, to ensure they are not misled or steered into inappropriate products by unscrupulous insurance agents.

“Today we put financial institutions on notice that we will hold them responsible for customers who are cheated out of their investments,” Sen. Dodd said Friday. “When incidents of abuse and exploitation happen it is unacceptable. I thank the governor for signing this much-needed law that will require insurance agents to do what’s best for their clients. If they know an annuity is a bad fit, they will not be able to sell it.”

Senate Bill 263 is the latest consumer protection proposal from Sen. Dodd. Sen. Dodd is also authoring SB 278, which would hold financial institutions accountable for not protecting seniors when they are victims of fraud.

Also last year he introduced SB 478, which would outlaw hidden fees in an array of transactions, including banking.

In his continuing effort to protect our state’s most vulnerable, Sen. Dodd’s SB 263 would require insurance producers and insurance companies to strengthen suitability standards for the sale of annuities.

The bill would ensure California meets federal and national model standards, while providing additional consumer protections.

The goal is to prevent the sale of these financial products to people who do not understand them or would not benefit from them.

The bill is sponsored by Insurance Commissioner Lara and supported by the California Commission on Aging. It won unanimous, bipartisan support in the Legislature before being signed by the governor.

“Gov. Newsom’s signing of SB 263 puts consumers’ best interests ahead of insurance company sales of annuities,” said Insurance Commissioner Ricardo Lara, who sponsored SB 263. “This new law protects California seniors by requiring all sales of annuities be based first and foremost on the facts of their individual insurance needs, financial situation and goals. I commend Sen. Dodd for authoring this commonsense consumer protection law.”

Dodd represents the Third Senate District, which includes all or portions of Napa, Solano, Yolo, Sonoma, Contra Costa and Sacramento counties.