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AIG may have sold annuities claiming a 1% Bonus, then secretly recouped that bonus using undisclosed actuary tables.
Investigation Source
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Misrepresentation
- Excessive or Unauthorized Fees
- Investments
- Undisclosed Fees By Investment Advisors
- Deferred Annuities
Product or Service
- Annuities
Injury Type
- Monetary Loss
Investigation Details
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.
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.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| 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. |