Insurance Commissioner Jones Announces Consumers Receive $17 Million In Suit Against National Western Life Insurance Company
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced that more than $17 million was distributed to 3274 senior citizens who purchased National Western annuities. This completes the final phase of the Class action lawsuit
"This case demonstrates why I have taken steps to issue regulations aimed at stopping the sale of unsuitable annuities to unsuspecting seniors," said
The suit alleges that Chapman failed to disclose to the woman that National Western would apply surrender penalties if she withdrew money or if she died during the 15-year surrender penalty period. Since she passed away during that time, National Western deducted 25 percent as a penalty, denying her beneficiary the entire amount of the annuity.
According to CDI, National Western's business plan targeted selling annuities to seniors. The suit alleged the company set up an unlawful group annuity policy that was issued through an out-of-state group created by National Western, and the company sold the annuity to individual senior citizens, rather than to members of any groups. "The company created the plan to avoid
Ezra Chapman's insurance agent license was revoked and he faces an injunction which stops him from ever getting it back. As part of the settlement National Western is also subject to an injunction and agreed to change its business practices.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.