Legal Action Over Unsuitable Annuities: Ameritas Insurance Case

Andrew and Jennifer Johnson have launched legal action against Ameritas Mutual Holding Co. and its subsidiary, Ameritas Life Insurance Co. They allege that the company sold them unsuitable equity-indexed annuities. Originally filed in North Carolina state court, the defense has requested a case transfer to the District Court for the Eastern District of North Carolina following mediation, where Ameritas claims a settlement was reached in August.

The plaintiffs, a retired U.S. Navy captain and a pharmacist, accuse Ameritas of engaging in a deceptive scheme. They claim the annuities, sold to them by broker Allison Terlip, were inappropriate for their investment goals, especially given Terlip's undisclosed criminal history. The Johnsons liquidated $926,000 from their investment accounts to purchase these complex financial products.

Ameritas allegedly failed to disclose critical details concerning Terlip's past, including a felony charge resolved with a no-contest plea. Despite BrokerCheck data indicating Terlip's termination in October 2023, the Johnsons argue Ameritas allowed her to complete the annuity sales post-dismissal. Ameritas maintains that an agreement from the mediation process, including annuity surrender, should be binding, citing communications from the Johnsons’ counsel. The insurer has now requested court enforcement of the agreement, underscoring the insurance industry's regulatory and compliance challenges in ensuring transparency in product suitability assessments.