Legal Battle Over Annuity Charges Highlights Disclosure Issues
A legal case involving a retired Navy veteran and his spouse is under judicial scrutiny, centered on surrender charges related to equity-linked annuities purchased from Ameritas Mutual Holding Co. Andrew and Jennifer Johnson have initiated legal action against Ameritas Life Insurance Co. and broker Allison Terlip, contesting an $80,000 surrender cost in the District Court for the Eastern District of North Carolina.
Ameritas claims a resolution agreement was achieved through mediation in August and is seeking judicial enforcement. However, the Johnsons dispute this, filing to delay the enforcement motion to present their argument in state court. They maintain that no formal settlement agreement was signed, challenging the $80,000 charge.
Allegations of Misrepresentation and Non-disclosure
The lawsuit filed on August 27 in Warren County alleges that Ameritas misrepresented the suitability of equity-linked annuities and withheld critical information about broker Allison Terlip. The Johnsons had liquidated approximately $926,000 in investments to purchase these allegedly unsuitable annuity products.
They further allege Ameritas did not disclose Terlip’s criminal history, including a plea of no contest to aggravated assault charges, which could have influenced their broker interactions. Despite being terminated by Ameritas in October 2023, the Johnsons allege she was allowed to process transactions post-termination.
Disputed Mediation and Settlement Terms
Recently, Ameritas filed a motion to enforce a purported mediation settlement from August, claiming the Johnsons' legal representative accepted it via email on August 9. The proposed deal included Ameritas making a compensatory payment in exchange for the relinquishment of annuities by the Johnsons.
The Johnsons counter that the acceptance was preliminary, requiring further formalization. They assert a subsequent draft by Ameritas introduced the disputed $80,000 surrender charges, a term they had expressly rejected, leaving the matter unresolved.
Implications for the Insurance Industry
This case holds significant implications for the insurance industry, particularly regarding annuity product sales, disclosure obligations, and mediation practices. Its outcome may influence future annuity contract disputes and the responsibilities of brokers within these transactions.
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