Allianz Insurance: History of Alleged Deceptive Annuities Practices

The use of deceptive sales tactics for deferred annuities is a growing problem, with seniors as easy prey because they have more assets that can easily be shifted into these products.

When the stock market is volatile, annuities are often marketed to seniors as a safe haven for money that is guaranteed to grow over time.

This is not necessarily true, and the penalties for surrendering the annuities can be extremely high and make the seniors’ investments vulnerable.

One company accused of misleading seniors is Allianz Life Insurance Company of North America.  The insurance company has a history of elder abuse and fraud and is currently facing multiple deferred annuity lawsuits.

The company has also settled multiple class actions alleging that they improperly marketed and sold deferred annuities to seniors.

About Allianz Life Insurance Company

Allianz Life Insurance Company of North America (Allianz) is based in Golden Valley, Minnesota and is owned by Allianz SE of Germany. Allianz SE is the largest financial services company in the world, with approximately $75 billion in assets and approximately $3.5 billion in net worth.

The company sells fixed and variable annuities, life insurance policies and long term care insurance products. Since 2000, Allianz sold nearly 5,000 deferred annuities to seniors over the age of 70, totaling over $259 million.

What is a Deferred Annuity?

Deferred annuities are insurance products that require a lump sum payment but do not pay out any money for a fixed term of years. Annuities provide purchasers with a monthly income for a future date, but are not usually appropriate for people over the age of 65 because their terms can be long.

Essentially, the investor’s money is locked in the annuity for up to 15 years, and withdrawing the money before that time expires can result in hefty penalties.

Allianz: History of Fraud

Allianz Life Insurance Company has faced at least seven lawsuits over how the company marketed and sold deferred annuities to seniors.

Plaintiffs have argued that Allianz targeted seniors when marketing annuities, even though the annuities were not suitable for many senior citizens. Furthermore, they allege that agents were offered larger than normal commissions as incentives to make sales.

In 2007, Allianz settled a lawsuit filed by Minnesota Attorney General Lori Swanson, who alleged that the insurance company sold deferred annuities to senior citizens in Minnesota without first determining whether or not the annuities were suitable investments for seniors.

The lawsuit further alleged that the annuities, which were marketed and sold to seniors, actually restricted investors’ access to the annuities for up to 15 years and misrepresented the terms of the annuity.

The settlement affected approximately 7,000 seniors in Minnesota. As part of the settlement, Allianz agreed to change how it reviews annuity applications for consumers aged 65 or older.

In 2008, Allianz agreed to pay $10 million to settle allegations that the company sold unsuitable annuities to senior citizens in California. In the same settlement, Allianz agreed to better explain its products to customers.

The lawsuit, filed by the California Department of Insurance, named more than 100 senior citizens who traded their existing annuities for Allianz annuities.

Under the settlement, Allianz paid a $3 million fine, contributed $3.75 million over five years to a fund to prosecute financial abuse and gave $3 million to an investment network that assists underserved communities. Allianz also agreed to provide seniors with more protection regarding the purchase of annuities.

And it doesn’t end there.  In 2014, Allianz reached a $251 million settlement to end two racketeering class actions alleging it lured 230,000 seniors into buying poorly performing deferred annuities with harsh surrender policies, according to a filing in California federal court.

Allianz Lawsuits

In general, lawsuits against Allianz allege the company sold deferred annuities to senior citizens that were unsuitable for seniors’ financial needs.

These deferred annuity lawsuits also allege that the insurance company did not adequately disclose that seniors could have their limited savings tied up for as long as 15 years, could not cash in their annuities early without paying hefty surrender penalties, and that payments advertised as “immediate” bonuses were not payable for up to 15 years.

If you or a family member were sold a deferred annuity from Allianz Life Insurance Company of North America or another insurance company, you may be eligible to participate in an Allianz class action lawsuit.

Get a Free Life Insurance Claims/Annuity Fraud Lawsuit Review

If you or your loved one purchased a bonus annuity, life insurance policy or Medicaid qualified annuity and it did not turn out as promised, you may need to have an investment fraud lawyer review the policy, the payments, and the potential benefits. You may be surprised at what they find, and you may even qualify for financial compensation beyond what the policy promised.

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