A life insurer has paid about $17 million in connection with an annuity class-action lawsuit settlement, according to officials at the California Department of Insurance.
National Western Life Insurance Company, Austin, Texas (NASDAQ:NWLI), paid the money to 3,274 senior citizens who bought annuities from the company, according to California Insurance Commissioner David Jones.
National Western announced the settlement in February 2010 and included the cost of the settlement in 2009 financial results, accounting to reports the company has filed with the U.S. Securities and Exchange Commission (SEC).
Lawyers for the annuity purchasers argued that the senior citizens bought the annuities without receiving adequate explanations of the penalties that would apply if they withdrew money or died within the annuities’ surrender periods.
The class was made of consumers who bought the annuities while living in California, according to National Western.