Minnesota Attorney General Lori Swanson filed suit Tuesday in Hennepin County District Court against a large life insurer.
The suit alleges the insurer, Allianz Life Insurance Company of North America, Minneapolis, violated Minnesota laws that prohibit false advertising, consumer fraud, deceptive sales practices, and sale of deferred annuities that are unsuitable for the buyer.
The suit seeks to stop the insurer from making inappropriate sales. It also seeks civil penalties and restitution for affected Minnesota seniors.
Swanson alleges Allianz Life and its agents failed to tell seniors that they could not cash in their annuities early without paying hefty surrender penalties, and that “immediate” bonuses offered with the annuities would not be payable for up to 15 years.
Allianz Life agents used invitations to estate planning or wealth management seminars to sell Allianz Life annuities to seniors, Swanson says.
The attorney general’s office is reviewing other companies’ annuity sales practices for evidence of unsuitable sales and deceptive marketing, Swanson says.
Allianz Life sells traditional fixed annuities, indexed annuities and variable annuities.
Allianz Life “strongly disagrees” with Swanson’s allegations and is confident it has complied with Minnesota law, says Jody Hilgers, an Allianz Life vice president.
“We will vigorously defend our products, practices and legal position,” Hilgers says.
More than 99% of Allianz Life annuity policyowners have never filed a complaint with Allianz Life, Hilgers says.