Facts

A class action was filed against American National Insurance Co. The class included the owners of deferred annuities that plaintiffs bought or defendant issued between Jan. 1, 2002 and Dec. 31, 2010.

PLAINTIFFS' CONTENTIONS:
Plaintiffs alleged that defendant implemented a fraudulent scheme to methodically market and sell fixed and equity indexed deferred annuities to the elderly. Plaintiffs alleged that defendant left out material facts and risks involved in the deferred annuities, the high surrender charges and penalties for early withdrawal, low rates of return, and interest enhancement and commission rate impacts. Further, plaintiffs claimed that the annuities did not comply with requirements to reveal the surrender period and associated penalties.

Result

With respect to each active annuity that is not a multi-year guaranteed annuity and owned by a person over 60 years old, defendant will make a single credit to the annuity value. For each surrendered annuity that is not a MYGA, and is owned by a person over 60 years old, defendants will give the greater of the surrender charge valuation of 25% or $200. For each death benefit and annuitized annuity, defendant will pay $200 to the applicable beneficiary.