AvivaUSA has settled a lawsuit brought by the Minnesota Attorney General that alleged the company sold unsuitable long-term deferred annuities to senior citizens. AmerUs Life Insurance Co. and American Investors Life Insurance Co., which were bought by AvivaUSA in 2006, were charged by Minnesota Attorney General Lori Swanson with misrepresenting or failing to disclose terms of these annuities. Des Moines-based AvivaUSA is the nation’s largest seller of equity-indexed deferred annuities.

The settlement, which has been approved by a Minnesota state court judge, requires Aviva to refund about 4,500 policies made to Minnesota seniors. The policies have an estimated value of $250 million. The Minnesota Attorney General previously reached similar settlements with Allianz Life Insurance Co. and American Equity Investment Life Insurance Co. of West Des Moines. There is a fourth lawsuit against Midland National Life Insurance Co. pending in a Minnesota court.

Minnesota consumers who were age 65 or older and had bought a deferred annuity from Aviva/AmerUs between January 1, 2001 and October 22, 2008, can file a claim for a full refund, including interest, without penalty. Relating to the settlement, Attorney General Swanson said in a statement:

I am pleased that … we have been able to obtain refunds for Aviva’s policyholders, especially during these tough economic times where many seniors on a fixed income are seeing their expenses skyrocket.

Under the settlement, Aviva agreed to “request and obtain additional information from consumers that is necessary to make a suitability determination.” This will include collecting monthly income, living expenses and disposable income, as well as liquid assets and anticipated changes in any of these areas. Aviva will also conduct an additional review of the suitability of the products for consumers 65 years of age or older. As part of the settlement, AvivaUSA also agreed to pay the state of Minnesota $375,000 to reimburse expenses. If you want more information on the Aviva litigation contact Jay Aughtman at 800-898-2034 or by e-mail at Jay.Aughtman@beasleyallen.com.

Source: Des Moines Register

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