Investment News reports that two life insurance companies are suing a handful of broker dealers over the sale of variable annuities to terminally ill annuitants.
The suit involves a Rhode Island-based attorney who allegedly solicited terminally ill people through advertising and an offer of $2,000 per variable annuity purchase.
The suit involves alleged misleading sales by representatives of certain broker dealers. The insurance companies consider broker dealers to be responsible for adequate supervision of the representatives' sales processes.
In their suits, the insurers claim that they were misled by the broker-dealers and their registered reps about the relationship between investors and annuitants, that the brokerage firms and reps failed to disclose the annuitants' terminal illnesses and that the firms violated contractual obligations to train and supervise their reps.
Source: Investment News
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