Ohio National Faces Flood of Litigation After Axing Life Annuity Commissions
March 5, 2019 by Greg Land
Ohio National Life Insurance Co. is weathering a legal storm after announcing late last year that it will no longer pay ongoing “trail” commissions to brokers and advisers who sold and serviced its variable annuities from 2012 through 2018.
At least 10 lawsuits have been filed in federal courthouses around the country since the insurer and its affiliates curtailed the payments to tens of thousands of brokers and stopped selling the annuities.
According to court filings, Ohio National and its subsidiaries sold more than $10 billion in new variable annuities between those years, with between 50,000 and 75,000 independent broker-dealers being paid regular commissions until the insurer unilaterally terminated its contracts with them last year.
The lawsuits claim Ohio National breached agreements under which the brokers were guaranteed to receive trail commissions until the annuities were surrendered or annuitized—i.e. converted into fixed, regular payments by the purchaser.
Click HERE to read the full story via Law.com
