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Seniors Win $17M in National Western Settlement
By Mike Holter
More than 3,274 senior citizens who purchased annuities from National Western Life Insurance will share in a $17 million class action lawsuit settlement over allegations the company targeted seniors with hidden penalties and false representations.
According to the class action lawsuit, titled Clark v. National Western Life Insurance Co, National Western’s business plan targeted selling annuities to seniors. The lawsuit alleged the company set up an unlawful group annuity policy that was issued through an out-of-state group created by National Western, and that the company sold the annuity to individual senior citizens, rather than to members of any groups.
“The company created the plan to avoid California consumer protection statutes and other state laws that protect, not only the elderly, but all citizens against inappropriate annuity products and sales practices,” said California Department of Insurance Commissioner Dave Jones in a statement.
The California Department of Insurance (CDI) got involved in the case in 2005 following a 2004 lawsuit that alleged a former life insurance agent sold a National Western contract to an 83-year-old widow under the pretense that she would never lose money. The agent allegedly failed to disclose to the woman that National Western would apply surrender penalties if she withdrew money or if she died during the 15-year surrender penalty period. The woman, in fact, died during that time, and National Western deducted 25% as a penalty, denying her beneficiary the entire amount of the annuity, the CDI reported.
The insurance agent who sold the policy has subsequently lost his license and faces an injunction which would prohibit him from getting it back.
In addition to paying class members nearly $17 million, the National Western class action settlement also requires the company to change its business practices.
Updated April 30th, 2011
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One thought on Seniors Win $17M in National Western Settlement
We need to know how to contact those who do know if we are entitled to any part of the settlement. My Mother-in-law owned FOUR annuities which were sold to her as life insurance in her elderly years
Any help will be appreciated