A Midwestern official has accused an insurer in her state of making unsuitable sales of long-term deferred annuities to senior citizens.
Minnesota Attorney General Lori Swanson has filed a suit against Midland National Life Insurance Company, West Des Moines, Iowa, in a state court in Minneapolis.
Swanson alleges that Midland National failed to comply with Minnesota suitability laws, which require an insurer to make sure that an annuity is suitable for a senior citizen who buys the annuity.
In some cases, Midland National sold long-term deferred annuities to senior citizens who could not afford to have money tied up for 10 to 14 years, Swanson says.
Midland National is rejecting Swanson’s allegations.
“This lawsuit is unnecessary, and the attorney general’s press release is wrong,” says Esfand Dinshaw, president of the company’s annuity division.
“Before the lawsuit was filed, we asked the attorney general to identify any problems with any annuity and complaints,” Dinshaw says. “The attorney general categorically refused. As we told the attorney general, if we had received information about a specific complaint, we would have reviewed the situation and taken appropriate measures.”
Midland National rejects allegations in the complaint that Midland has inadequate suitability procedures, Dinshaw says.
At Midland National, customers can turn to a special dispute resolution process to look into concerns about the possibility that they might have bought inappropriate annuity contracts, Dinshaw says.
Stephen Horvat Jr., Midland National’s chief legal officer, says Swanson appears to be trying to take away the regulation of insurance companies, their products and their sales processes from the proper regulatory bodies.
Swanson “is trying to impose her new standards that do not reflect Minnesota law or regulations,” Horvat says.