Minnesota Attorney General Lori Swanson says an insurer has agreed to offer 4,500 Minnesota consumers refunds on up to $250 million in indexed annuity contracts.

Swanson says a state court judge in Hennepin County, Minn., has approved a settlement of a suit filed against AmerUs Life Insurance Company, Des Moines, Iowa, and an affiliate, American Investors Life Insurance Company, which are now part of Aviva USA Corp., Des Moines, Iowa.

Swanson alleged in the AmerUs/American Investors lawsuit that the company sold unsuitable long-term deferred annuities to senior citizens and misrepresented the annuities or failed to disclose the terms of the annuities.

Representatives from Aviva USA, a unit of Aviva P.L.C., London, say the company believes its settlement with Swanson’s office demonstrates the company’s commitment to ensuring consumer confidence.

“We believe that the vast majority of products we have sold are suitable; therefore, we anticipate that this agreement will not have a material impact on the company,” the company says. “Less than 1% of Aviva USA’s customers have complained to the company about its products, which, we believe, reinforces the effectiveness of our existing suitability programs.”

These days, the company says, many holders of the annuities may be happy to see that Aviva USA protected them against the risk of market loss, the company says.

The terms of the Minnesota settlement call for Aviva USA to let Minnesota seniors make refund claims involving about 4,500 policies with an estimated value of about $250 million.

The refund offer will be available to Minnesota consumers who were ages 65 or older and bought a deferred annuity from Aviva USA, AmerUs or American Investors between Jan. 1, 2001, and Oct. 22, 2008.

“Refund requests will be ‘liberally construed’ in favor of the consumer,” officials say.

If reviewers decide that a refund is in order, Aviva USA will offer the consumer a refund of premiums, without surrender charges or penalties, plus 4.15% interest compounded annually, officials say.

Swanson says Aviva USA also has agreed to conduct detailed suitability reviews when it makes future annuity sales and to conduct more intense reviews for applicants ages 65 and older who face or may face a need for access to ready cash.

Aviva USA also has agreed to pay Minnesota $375,000, officials say.