Wouldn t you want to know if your brokerage firm got jittery about a company whose products you own? Probably, but that doesn t mean your broker would tell you. In fact, dozens of brokerages are discontinuing the sale of insurance products (read: annuities) they deem too risky, and analysts say more are on the way. But the bans typically only apply to new clients, not old ones, leaving thousands of clients already invested in the now-shunned products in the dark.

Most notably, State Farm Mutual Automobile Company and National Life Group banned the Phoenix Wealth Management s insurance and annuities products in March after Moody s downgraded Phoenix s credit rating in February. LPL Financial also told its 11,000 independent brokers not to sell the Phoenix or Genworth Financial (GNW) products in January after both companies stocks plummeted more than 80% in the last few months of 2008. (LPL declined to comment.)

But few firms instructed their brokers to inform clients already invested in these products. State Farm sent an email to its 17,000 agents about not selling to new clients; it was up to the agent to decide whether or not to tell existing customers, says a State Farm spokesperson. The firm says its agents were constrained in what they could say by a warning from the insurance commissioner in Connecticut, where Phoenix (and many other insurers) is based. The commissioner s notice, released in April, discourages brokers from expressing concerns about products its clients are already invested in. The commissioner s notice says that advising a client to replace insurance products based on a perception of an insurer s weakened financial strength could erode consumer confidence and be considered unfair and deceptive. What s more, a spokesperson for the commissioner s office noted that, in the past, brokers have used information about an insurance firm s weakened finances to sell new products and collect new commissions. (National Life confirmed that they stopped selling Phoenix products but didn t require brokers to tell existing clients.)

Not all firms are remaining quiet. Raymond James, which suspended the sale of AIG (AIG) products last fall, says not saying something would be negligent. But the firm is resisting product bans in general, partly because it s hard to know what to tell clients. Get out now is the wrong advice for most clients, says head of Raymond James s insurance division Scott Stolz. Clients have to weigh the tax consequences and penalties of switching. And there s no guarantee that a troubled insurance firm won t recover. When the federal government stepped in only days after Raymond James banned AIG s products, there was nothing left to say, says Stolz, because clients were safe. That may be, but don t wait for your insurer to hit the headlines before calling your broker.