Ameritas settles with Navy vet in lawsuit over disputed annuity sale
Ameritas Life Insurance Corp. and its affiliated broker reached a settlement with a retired Navy veteran over a disputed indexed annuity sale.
The agreement resolves a lawsuit brought by Andrew and Jennifer Johnson, who alleged wrongdoing regarding the marketing and sale of the financial product. Terms of the settlement were not disclosed.
The Johnsons sued Ameritas Mutual Holding Co., Ameritas Life Insurance Co., and broker Allison Terlip. All parties filed a request on Wednesday to dismiss the case with the District Court for the Eastern District of North Carolina.
“These parties request that the Court retain jurisdiction for any matters related to completing and/or enforcing the settlement,” the joint notice of settlement reads.
Scheme alleged
In its lawsuit filed Aug. 27 in Warren County state court, the Johnsons claim that Ameritas is liable for a “sophisticated scheme … to defraud” them via the sale of unsuitable equity-linked annuities. In addition, the insurer allegedly withheld information about Terlip.
The Johnsons liquidated about $926,000 in “diversified treasury securities and mutual funds held in their Thrift Savings Plan and Vanguard accounts, the lawsuit states. They used those proceeds to purchase three “concentrated, illiquid and unsuitable proprietary” equity-linked annuities from Ameritas.
The Johnsons allege that Ameritas deliberately concealed Terlip’s felony aggravated assault with a deadly weapon charge and her subsequent no-contest plea in July 2023, calling it “material information that Defendants knew would have prevented Plaintiffs and other customers from ever doing business with Terlip or the Ameritas enterprise.”
According to court documents and BrokerCheck, Ameritas fired Terlip in October 2023.
The Johnsons describe the three annuities as “complex products with lengthy surrender periods, substantial penalties for early withdrawal, opaque fee structures, and risks entirely unsuitable for the Johnsons’ stated need for liquidity and conservative investment approach.”
Disputed settlement
On Jan. 5, Ameritas filed a motion to enforce a settlement agreement, stating that the Johnsons’ attorney agreed to it in early August. According to the insurer, the Johnsons sued Terlip and Ameritas Investment Co., and the two parties engaged in mediation talks as part of the Financial Industry Regulatory Authority‘s dispute resolution process.
Those talks took place Aug. 8-9 and resulted in agreement on a payment from Ameritas to resolve all claims, court documents say. The Johnsons were to surrender the three annuities as part of the resolution, Ameritas noted.
Counsel for the Johnsons accepted the mediator’s settlement agreement in an Aug. 9 email that read: “Agreed. Thanks gents[sic]. Enjoy your weekend.”
The Johnsons disputed that characterization in their memo, calling it “at most, a post-session term sheet expressly contemplating a later written agreement to be drafted by defense counsel, subject to Plaintiffs’ counsel’s approval.”
Five days later, Ameritas circulated a draft that inserted the language that the plaintiffs had rejected from the outset: shifting approximately $80,000 in annuity surrender charges to the Johnsons, court documents say.
A scheduled Tuesday hearing on an Ameritas motion to enforce the settlement agreement has been canceled, according to court records.
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