GREAT AMERICAN FINANCIAL SETTLES ANNUITY ISSUES WITH MINNESOTA AG

Cincinnati-based Great American Life, Annuity Investors Life and Loyal American Life, subsidiaries of Great American Financial Resources (GAFRI), have reached a settlement with the Minnesota Attorney General regarding annuity sales to the state’s senior citizens. The GARFI subsidiaries have agreed to notify all their Minnesota customers who were 65 and older when they purchased deferred annuities between January 1, 2001, and August 1, 2008, that they may submit a claim for a penalty-free refund of their premiums. If it is determined that the annuity sold to a customer was unsuitable or based on misrepresentations, the annuity providers will both refund the premiums without penalty and pay 4.15% annually compounded interest on the premiums paid. In addition, the GAFRI subsidiaries have agreed to enhance their suitability requirements for annuity sales to seniors, determining whether the senior has sufficient liquid assets and income to pay for living expenses and emergencies. Minnesota Attorney General Lori Swanson estimates that refund claims could be submitted for 2,000 policies worth a combined $50 million. Swanson said, “Many senior citizens face economic difficulty in this troubled economy, and this settlement provides a vehicle for them to obtain funds.” GAFRI Chief Operating Officer Charles R. Scheper said, “We have engaged in comprehensive and good faith efforts to reach out to our annuity contract owners and respond to any issues or concerns they had with their product or sales process … and we are willing to continue to work with [the Attorney General’s] office to address any issues that have yet to be brought to our attention.”