Annuity rates in Chile (defined as the internal rates of return that equate the present value of expected payments to the premium paid by annuitants) are studied and related with industry competition. We document that: a) annuity insurance companies paying higher broker commissions paid lower annuity rates (or obtained lower financing costs); and b) there was a structural break in the long-run elasticity of annuity rates with respect to the risk-free rate in 2001, which coincided with the submission of a new draft pension law that proposed greater transparency in annuity markets and imposed a cap on broker commissions. We argue that the evidence is mostly consistent with the following joint hypothesis: i) The high commissions charged in the 1990s were partly returned to annuitants as informal (and illegal) cash rebates, ii) Myopic pensioners prefer cash rebates over present values. iii) Therefore the legal threat caused the drop in broker commissions, tightened the slack for cash rebates, increased competition via annuity rates, and raised the long-run elasticity to one.