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Elderly Annuities

Sacramento, CA: (Feb-14-08) The state Department of Insurance filed a lawsuit against Allianz Life Insurance Co., alleging that the largest seller of annuities in California targeted thousands of seniors in deceptive annuity sales. The suit accused Minneapolis-based Allianz of deceiving elderly victims into purchasing confusing annuity products that were financially unsuitable for their needs.

An annuity is an insurance contract that is created when an individual gives a life insurance company money that may grow on a tax-deferred basis and then can be distributed back to the owner, either immediately or over a period of time. Investigations revealed that Allianz deceptively replaced 126 existing annuities for seniors who were between 84 and 85 years old. More than 97 percent of the annuities that Allianz replaced for this age group between January 2004 and July 2005 were financially unsuitable.

Sources close to the case stated that as part of a settlement reached, Allianz agreed to a $10 million payout with the state Department of Insurance to resolve allegations. As part of the deal, the company agreed to a first-of-its-kind suitability review to further safeguard seniors from aggressive and deceptive marketing. [SACRAMENTO BUSINESS JOURNAL: ELDERLY ANNUITIES]

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Published on Feb-18-08


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