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Court Certifies Class-Action Suit Against Annuity Issuer

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A federal judge has given lawyers permission to represent a class of plaintiffs who have bought equity-indexed annuities from a large Midwestern insurer.

U.S. District Judge Ann Montgomery, a judge in the U.S. District Court in Minneapolis, has certified Linda L. Mooney and Lieselotte W. Thorpe, et al., v. Allianz Life Insurance Company of North America as a class action.

The legal team representing the plaintiffs includes lawyers at Page Perry L.L.C., Atlanta; the Nygaard Law Firm, Leawood, Kan.; and Chestnut & Cambronne P.A., Minneapolis.

The lawyers for the plaintiffs estimate the class could include 400,000 individuals who have bought the BonusMaxxx, BonusMaxxx Elite, BonusDex, BonusDex Elite, 10% Bonus PowerDex Elite, MasterDex 10, and the InfiniDex 10 annuity contracts from Allianz Life, Minneapolis, since Feb. 9, 2000, according to the lawyers for the plaintiffs.

The class does not include California purchasers who were over the age of 65 when they bought the annuities, according to the lawyers for the plaintiffs.

The plaintiffs allege in their complaint that Allianz Life, a unit of Allianz S.E., Munich, violated Minnesota consumer protection laws by leading prospective and existing policyholders to buy 2-tiered equity-indexed annuities by indicating, incorrectly, that the insurance products offered large “up-front” bonuses that could overcome the effects of investment losses, surrender penalties and income taxes suffered on previous investments.

Allianz Life has put out a statement rejecting the allegations made in the suit.

“Allianz Life has always taken great care to disclose the terms and features of our annuity products, especially as they relate to the bonus benefits of these products,” Allianz Life spokesman Jim McManus says in the statement.

“We believe our policies and procedures in this regard are among the most stringent in the industry and go beyond what is required by regulations,” McManus says. “We disagree with the court’s ruling to certify the class and refute the allegations made in the lawsuit. We want to emphasize that this ruling is procedural only and does not address the merits – or lack thereof – of the plaintiff’s claim. Allianz Life has and will continue to mount a vigorous defense and we are confident that we will prevail.”