Pennsylvania: A multi-million dollar settlement of a RICO (Racketeer Influenced and Corrupt Organizations Act) class action has been approved by a US District Court judge that could be worth anywhere from $184 million to $530 million, depending on how the plaintiffs react to policy changes that will result from the suit.
The plaintiffs in the class action are mostly elderly investors who allege that they were victims of deceptive marketing practices designed to lure them into making long-term annuities purchases, which in some cases had maturity dates that exceeded the investors' life expectancies.
Judge Mary A. McLaughlin was assigned to preside over a number of class actions brought against American Investors Life Insurance (AILI) Co, on behalf of more than 387,000 investors. The suits allege that AILI conspired with trust attorneys', annuity marketing firms, and sales agents to convince elderly clients to purchase "highly illiquid" investments that were not suitable for them, given their ages and life expectancies.
Under the terms of the settlement, AILI will remove surrender charges for class members whose policies are in deferral, while allowing the plaintiffs to obtain the accumulated value of their annuity over a period ranging from two to seven years.
Judge McLaughlin also approved $17.7 million in attorney fees and expenses.
