American General Life Insurance Company is asking a federal court in Indianapolis to void a $15 million life insurance policy it contends was purchased fraudulently, by a buyer who intended to sell the policy.
The insurer also is asking the court to allow it to retain the premiums paid on the policy and to order the agent who sold the policy to return his commissions.
The policy, purchased by Germaine Tomlinson in January 2006, was a stranger-originated life insurance policy and hence illegal under Indiana law, American General, Houston, part of American International Group Inc., New York (NYSE:AIG), alleges in court documents.
Tomlinson died Dec. 29, 2008.
What Your Peers Are Reading
As defined by American General in court papers, a STOLI policy is one in which “the insured and/or policy owners intended at incept for the policy or a beneficial interest in the entity that owns the policy to be sold, and the speculators require or agree to acquire an interest in the life insurance policy.”
Tomlinson’s policy was purchased as part of an effort “to recruit older persons to pose as applicants for and proposed owners of large-face-amount life insurance policies that were never meant to be for the benefit of the ostensible owners,” American General alleges in its suit, which was filed with the U.S. District Court for the Southern District of Indiana.
The defendants named in the case include Germaine Tomlinson Insurance Trust and its trustees; Carlson Media Group Inc., Indianapolis, which owns the trust and the disputed policy; and Geoffrey A. Vanderpal, Las Vegas, the broker who arranged Tomlinson’s purchase of the policy.