Insurance Companies Will Finally Get "Their Day In Court" to Defend the Suitabilty of Annuities--Literally

I was recently forwarded a link to the web site of a law firm who has put together a class action lawsuit against dozens of insurance companies. They are using backdoor claims that seminars sponsored by independent agents, who promote the use of estate planning trusts, were all a conspiracy supported by these insurance companies to abuse and defraud seniors into buying annuities.

But when you read what this firm has posted on their website, you see that this is nothing but another aggressive personal injury law firm’s attempts at getting into the pockets of BIG insurance companies for their own enrichment, not for any moral purpose or for the benefit of the participants. Just like the ambulance chasers who do those dorky advertisements on TV, this firm is trying to make a name, and a lot of money, for themselves by exploiting a popular issue that has a lot of media attention. As attorneys love to do, they can dramatically claim ANYTHING in the lawsuit they want, without having to prove or justify any of it at this point. The more people they can solicit to join this lawsuit only increases the potential amount they can collect for themselves if they are successful in their attempts.

When you see what the thrust of their claims really are, however, you realize that they are based in easily dismissed lies about the practices of insurance companies and the function of annuities. These insurance companies are not going to just lay down and take these false accusations, when defeating them with a good group of defense attorneys would not only save them the expense of an unjust settlement, but it could also prove to provide to the pubic an official validation that shows annuities as being perfectly suitable for seniors. When this case is tried and heard in an unbiased court of law, if it gets that far, the combined resources of all these companies should be able to easily disprove ALL of these false accusations.

The use of seminars to provide general information and bring together prospect and agent is a useful and perfectly appropriate venue that allows interested attendees to learn new information WITHOUT pressure or obligation. Still, if there were any improprieties in the recommendations or sale of trusts, it will be easy to show how those kinds of non-insurance activities by these agents are beyond the control or the responsibility of the named insurance companies. The attorney’s attempts to coin the phrase “Trust Mills” does not change the fact that an agent’s responsibility to the insurance companies to which they are contracted, and visa versa, is limited to the express authorization to sell that company’s products, and nothing further. Since a trust is a legal document, I bet if you looked deeper, the real culprits behind the overzealous use and promotion of trusts are lots of other greedy attorneys.

The final thing here is that these attorneys will have to prove that this group of people was materially hurt in some way, not just dissattisfied with their decisions. Unless the sale of an annuity was done fraudulently, something that no insurance company would condone, and that this action can then be proven to have harmed the purchaser, there is no case. The fact that there are contractual rules and limitations in an annuity contract does not make them an inappropriate product nor does that make the sale of them to willing customers fraudulent or unsuitable. Insurance law requires that all of these contract provisions are properly and fully disclosed LONG before the prospect is “locked” into their contract commitments. Every company mentioned in this suit only has to produce the signed disclosure statements to prove that the prospect was not deceived into anything. Since these attorney’s have chosen to pursue this as a class action suit, I believe it will have to ultimately be proven in court that the entire group has been harmed in the same way for this lawsuit to succeed.