Recent federal court decisions effectively terminated two class
action lawsuits challenging indexed annuity sales, seemingly ending
an extended wave of class litigation in the federal courts against
multiple insurers predicated on allegations of inferior or
misrepresented "value," "illusory" benefits, or
"hidden fees" in the form of commissions.
Chambers v. North American Co. for Life &
Health
In June, a federal court in Iowa denied Chambers'
motion to certify two classes of North American annuity purchasers
based on claims under the Racketeer Influenced and Corrupt
Organizations Act (RICO) and for breach of contract. As in most
earlier filed class cases against annuity issuers, the RICO claims
were premised on alleged misrepresentations about initial sales
charges or fees, premium bonuses, and market interest adjustments.
The breach of contract claim rested on another familiar allegation
in class action annuity litigation: that the insurer violated
promises to
