Investigation and pending class action lawsuit against AIG for selling deferred annuities with a "bonus annuity" feature.
In summary the class action alleges that AIG sold her an annuity, as an investment, for which they contractually guaranteed her a permanent 1% interest rate bonus to be paid in year one. Even though the plaintiff agrees that the 1% bonus was credited to her account, she alleges that the defendant began "recouping" the 1% bonus, undisclosed to her, in year two.
In fact, evidence suggests that AIG used a secret actuarial pricing formula that built in an undisclosed spread (beginning in year two) which unilaterally recouped twenty basis points of interest per year for five straight years equating to a full 100% recovery of the 1% bonus previously credited.
Name (Stock Symbol)
American International Group (AIG) (AIG)
American International Group, Inc. (AIG), provides insurance and financial services with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. AIG also sold credit derivative swaps, effectively insuring certain corporate obligations and asset backed securities against default. The US government has injected over $160 billion into AIG and owns 80% of AIG stock.
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