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CA Department of Insurance
CA Department of Insurance
CA Department of Insurance

Insurance company must repay 86-year-old customer after selling an annuity she did not understand

News: 2021 Press Release

For Release: August 5, 2021
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov
Insurance company must repay 86-year-old customer after selling an annuity she did not understand
Department of Insurance action also leads to $150,000 penalty for Jefferson National Life Insurance Company

SACRAMENTO, Calif. — Insurance Commissioner Ricardo Lara announced that Jefferson National Life Insurance Company will return $14,000 in fees charged to an 86-year-old California consumer who purchased an annuity she did not understand – along with a $150,000 penalty for creating an annuity sales process that lacked consumer safeguards. The settlement with the California Department of Insurance comes after an accusation alleging violations of California law.

“My Department steps in when insurance companies do not diligently protect their senior customers,” said Commissioner Lara. “Thanks to our actions, this California consumer will be getting her money back, and this company has implemented new protections to prevent abuses like this in the future.”

In 2018, the Department was notified of the sale of two Jefferson National variable annuities worth approximately $690,000 to an 86-year-old consumer in San Francisco. The consumer, who acted on her investment adviser’s recommendation, later stated she did not understand what a variable annuity was or how much she had invested in the products.

The Department alleged that Jefferson National did not have sufficient protections in place to protect consumers. Its only involvement in this process was that its licensed insurance agent simply had to sign the purchase application for the annuity. The process did not require the company to directly interact with consumers to confirm that they understood the terms of the annuities they were buying, or that the annuities were suitable for consumers’ needs.

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Media notes:



The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $371 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

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