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Monday, May 27, 2024 | Back issues
Courthouse News Service Courthouse News Service

Insurer Wins One in|Fight Against Old Folks

CHICAGO (CN) - A federal judge refused to certify a class that claims an insurance company preyed on elderly people and induced them to make poor investments.

Estella Rowe claims that Bankers Life and Casualty called her unsolicited in July 2007 and arranged an in-home meeting to discuss long-term care insurance. Though court filings simply state that Rowe was over 65 at the time of the call, her now late husband would have been about 80.

After learning that the Rowes had a variable annuity with another company with a cash value of $105,000, the two Bankers agents persuaded the Rowes to liquidate that annuity and buy one of Banker's annuities instead.

But Rowe now claims she and her husband would not have bought the annuity if they knew all of "the undisclosed and concealed risks and infirmities of their investment."

The Bankers annuity that the Rowes purchased for $101,985 had a maturity date of July 16, 2025, meaning that the Rowes would not receive any return on the annuity until Samuel Rowe was 99 years old. Because it also started with a 10 percent surrender charge, Bankers charged the Rowes $10,198 when they dipped into the account in December 2007.

Rowe filed a class action alleging that Bankers conspired with its sales agents to induce elderly consumers to buy equity-indexed deferred annuities that are unsuitable investments for anyone older than 65.

Rowe may be able to certify a California subclass because she showed that all Bankers' California customers received the same allegedly misleading disclosure form, according to the 24-page decision.

But U.S. District Judge Robert Dow Jr. refused to certify the class initially proposed.

"While Rowe makes sweeping allegations and charges in her second amended complaint and her brief, she has not provided evidence suggesting that Bankers' agents used 'uniform, scripted, and standardized sales presentations,'" Dow wrote "Instead, the evidence before the court demonstrates that each of Bankers' 4,600 independent sales agents located in over 200 nationwide sales offices had the discretion to conduct their home visits - where the actual sales transactions occurred - as they saw fit."

"Because Rowe has failed to demonstrate that potential members of the nationwide class received uniform written or oral misrepresentations or omissions, she cannot show predominance on the element of racketeering activity," he added.

Dow was also not convinced that equity-indexed deferred annuities are absolutely unsuitable for elderly investors.

"Seniors buy equity-indexed deferred annuities for a multitude of reasons, including saving for retirement, saving for some other purpose, or keeping money safe during the purchaser's lifetime so that it can be passed on to his or her heirs," the March 29 decision states. "Additionally, people age sixty-five and over have varying degrees of need for liquidity and, while some seniors may need to keep all of their assets liquid, that is not the case for all seniors. Thus, because the court is not convinced that there is no logical reason for a person over the age of sixty-five to purchase one of Bankers' annuities other than the fact that she was misled, it is not appropriate to infer class-wide reliance or causation in this case."

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