From the Office of the Insurance Commissioner:
Hundreds of thousands of people who were led to expect more interest than they got from annuities are eligible for a multi-million dollar class-action settlement â€“ if they sign up on time.
â€œConsumers across the country were misled, and Iâ€™m very glad to see this case finally resolved with restitution,â€ said Insurance Commissioner Mike Kreidler. â€œI urge anyone who qualifies to sign up for their share of the settlement.â€
The settlement involves Northern Life Insurance Companyâ€™s marketing of tax-sheltered fixed annuities, primarily to teachers, starting in 1995. (The company, which was based in Seattle, merged with Minnesota-based ReliaStar Life Insurance Co. in 2002.)
The annuity documents, Kreidler said, misrepresented to consumers the way that interest would be calculated over the life of the annuities. Instead, Northern Life paid a high interest rate only in the first year of the contract, reducing the rate during all the remaining years.
Under the settlement, Northern Life has agreed to pay $29 to $40 for each $10,000 in value of a personâ€™s annuity. The settlement provides up to $31 million for the payments. A King County Superior Court judge recently approved the mediated settlement, in which Northern Life did not admit wrongdoing.
Northern Life has notified 406,000 account holders that they are potentially affected by the settlement. An estimated 20,000 of those people are in Washington state.
â€œPeople are naturally skeptical of mailings,â€ said Kreidler, â€œbut donâ€™t just toss this one in the trash.â€
The one-page claim form, also available at www.curtissettlement.com, must be mailed back or before Oct. 17, 2011. (It can also be scanned and emailed by that date.) Under penalty of perjury, signers must certify that they owned a fixed annuity issued by Northern Life sometime between Jan. 1, 1995 and the present time.
Typical payments are likely to range from $60 to $80, although some will be significantly larger.
Private attorneys in the 10-year court case, which involved more than 1 million pages of documents, represented the claimants. Kreidlerâ€™s office investigated the issue and filed an amicus brief in the case, saying that misleading marketing had substantially harmed consumers.