While regulators and various state authorities continue to be disturbed by the sale of “indexed” annuities, insurance agents continue to sell them. After all, the marketing pitch is great (“guaranteed” principal protection), the commissions (often 12% or more) are too enticing to pass up, and regulators’ unease never really seemed to be an issue. That is, until last month, when Glenn Neasham, an independent insurance agent, was sentenced to 90 days in jail for selling just such an annuity to an 83-year-old woman who may have shown signs of dementia. The State of California alleged that Neasham, doing business as Glenn Neasham Insurance Agency, sold a $175,000 annuity to an 83-year-old woman who supposedly lacked the mental capacity to enter into the contract. The annuity’s purchase required her to withdraw her savings from a certificate of deposit, which investigators alleged was not in her best financial interest."Insurance agents or brokers who steal from vulnerable seniors will not get away with their shameful tricks," said Commissioner Poizner in a 2010 press release. "CDI investigators will continue working to track down any unscrupulous agent who preys on California's seniors." As expected, Neasham asserted in his defense that the woman seemed mentally competent when he sold her the annuity, and that he felt he had acted appropriately. It’s worth asking, however, how any insurance agent can say they “acted appropriately” when selling such a clearly inappropriate product to seniors, especially when dementia is one of the most common ailments in the elderly. (It currently affects four to five million Americans, and the numbers are growing.) Hopefully, the conviction against Neasham will serve as a warning to other insurance agents that they can be held responsible for selling complex annuities to people who do not understand the risks and downfalls of such products.