Banks that sell annuities and other other insurance products are worrying about ripple effects from a spate of bad news about insurers.

In recent days the Securities and Exchange Commission said it was scrutinizing 14 insurers suspected of churning variable annuity accounts. The news came on top of other problems insurers have faced recently, from difficulties paying claims to disaster victims to fights over approving life insurance policies for AIDS sufferers.

"I do worry," said Robert Carey, a vice president in Seattle overseeing planning and development at Frontier Financial Corp.'s investment services unit. Media coverage "paints a picture of the life insurance industry, and we get the splatters, so we have to be careful."

Just as banks are getting into life insurance sales, the underwriters they work with are getting more and more bad press. That makes bankers' lives more difficult, as they have to choose to break off a relationship with a company or defend it to customers.

Such big-name carriers as Aetna Life & Casualty Co., Equitable Cos., Travelers Insurance Group, and American General Corp.were named as being reviewed by the SEC.

"Everywhere you turn you have to face something going on," said Michael D. Hellyar, senior vice president, product and marketing strategy, at life operations at KeyCorp.

Insurance companies are under scrutiny because they are regulated by individual states, he argued. With different criteria in different states, they are bound to have problems, he added.

"There's so much scrutiny, but you can't be afraid of it," Mr. Hellyar said.

With the rapid growth of variable annuities, regulators' eyes will soon be on banks, he said. Since banks are novices at selling insurance products, regulators will likely take a longer look at them.

But Mr. Hellyar defended banks, stressing that most insurance companies work with contract agents, rather than in-house salespeople. Unlike a bank, which sells its products through its employees, insurance underwriters tend to have little control over their agency force.

"I said to our national sales manager recently, this is a customer- centered business, not an agent-centered one," he said.

Frontier's Mr. Carey faced a problem of choice recently.

Jackson National Life Insurance Co. of Lansing, Mich., rejected an application to increase the death benefit because a medical examination revealed HIV, the virus that causes AIDS. The company refused to tell the applicant he was HIV positive, and a Mississippi lawsuit that resulted became such a cause celebre that Mr. Carey's customers read about it in the Seattle Times.

Jackson was "portrayed as the cold-hearted company, and that reflected on us, because we did business with them," Mr. Carey said. He chose to stick with Jackson's products because the company did not violate any laws.

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