Midland National Annuity Fraud Class Action Settlement

Midland National Life Insurance Company has agreed to settle a class action lawsuit alleging it made misrepresentations about certain deferred annuities.

The annuity fraud class action lawsuit alleges that Midland failed to disclose that it shifted the cost of the bonus and high sales commissions on some of its deferred annuities back to purchasers through lower interest or index credits over time. The plaintiffs further allege that Midland failed to comply with the surrender charge disclosures required under California law. They assert causes of action for violation of California’s Unfair Competition Law, breach of contract, breach of the implied covenant of good faith and fair dealing, fraud and declaratory relief.

Midland has denied the allegations but agreed to the annuity fraud class action settlement, which received preliminary approval earlier this year.

Who’s Eligible

Class Members of the Midland annuity fraud settlement include the current or most recent owner of certain annuity products issued in California by Midland to a person who was 64 years old or younger. The annuities covered by the class action settlement are fixed deferred annuities marketed under the name Bonus 5, Bonus 10, Bonus 11, Legacy Bonus 5, Legacy Select, Legacy Bonus 11 or Veridian Plus.

Potential Award

If the Midland class action settlement is approved, Class Members may be entitled to receive one of the following benefits:

1)      If the annuity was issued to a purchaser aged 60 to 64 and surrender charges were incurred upon a partial or full surrender of the annuity, the purchaser will receive a surrender charge reduction payment. Midland has agreed to provide $3.5 million in surrender charge reduction payments to eligible Class Members. It is estimated that the surrender charge reduction payments will amount to approximately 78 cents for each dollar of net surrender charges.

2)      If the annuity was issued to a purchaser aged 0 to 59 and was fully surrendered on or before the benefit determination date, the purchaser will receive an enhanced surrender payment. Midland has agreed to provide $2 million in enhanced surrender payments to eligible Class Members. It is estimated that the enhanced surrender payments will be approximately 2.3 cents for each dollar of difference between accumulation values and surrender charges on which the enhanced surrender payments are based.

3)      If the annuity is active (not previously annuitized or surrendered), Class Members may receive the annuitization bonus.

4)      Class Members who have not already annuitized their annuity will automatically receive a 1 percent enhancement to each annuity payment made after the benefit determination date.

Proof of Purchase

N/A

Claim Form Deadline

N/A. Class Members who do not opt out of the Midland class action settlement will automatically receive any payments for which they are entitled.

Case Name

Rosalie Vaccarino, et al. v. Midland National Life Insurance Company, et al., Case No. 2:11-cv-05858-CAS-MAN, in the U.S. District Court for the Central District of California

Final Hearing

9/22/2014

UPDATE: The Court approved the settlement at the Final Fairness Hearing.

Settlement Website

www.VaccarinoSettlement.com

Important Update [FROM THE SETTLEMENT ADMINISTRATOR]:

On September 24, 2014, the Court entered its Amended Final Order Approving the Class Action Settlement and Final Judgment of Dismissal with Prejudice. Pursuant to Section II.A.13. of the Settlement Agreement, Midland will set the Benefit Determination Date for October 24, 2014. Accordingly, the Effective Date, under Section II.A.20. of the Settlement Agreement, will be advanced to October 24, 2014. Please refer to the Settlement Agreement and Class Notice for information about the Settlement benefits and the timing of those Settlement benefits.

Claims Administrator

Vaccarino v. Midland National Life Ins. Co.
Settlement Administrator
P.O. Box 43271
Providence, RI 02940-3271
1-866-247-8456

Class Counsel

GIANELLI & MORRIS

THE LAW OFFICES OF RONALD A. MARRON

Defense Counsel

REED SMITH LLP