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Life Health > Annuities

Allianz Life Faces Annuity Owner Suit

By Allison Bell

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A new California state court case concerns the obligations a life insurer has to annuity holders and other customers when an advisor is convicted of wrongdoing.

Layne Kramer and the Kramer Family Irrevocable Grant Trust assert in the complaint, which was filed last week in Los Angeles, that Allianz Life Insurance Co. of North America should have given Kramer more detailed information after her former advisor, David Neuman, was convicted of embezzling benefit payments from another client.

Allianz Life declined to comment on the suit.

Counsel have not yet appeared for Neuman, and he could not be reached for comment.

The plaintiff: The father of Layne Kramer, the plaintiff, died in 2012, according to the complaint.

Kramer helped her mother move to an assisted living facility in Thousand Oaks, California, then looked for an advisor to help apply for Veterans Affairs benefits and other benefits for her mother.

The advisor helped Kramer apply for the VA benefits, set up a trust and bank account for the trust, and buy non-variable indexed annuities.

The allegations: Kramer asserts that the annuities Neuman sold her were unsuitable because they tied up assets she needed for her mother’s care.

The advisor was convicted of embezzling from a client in 2018 and had his California insurance producer’s license revoked around that time.

“After Neuman’s license revocation, Allianz assigned another agent to plaintiff’s account, but did not advise her of Neuman’s conviction, nor did they notify plaintiff of the reasons for terminating Neuman’s appointment with Allianz,” Kramer told the court.

Neuman maintained a relationship with Kramer and, in 2020, he encouraged to her to add him as a trustee for the trust. Neuman then changed the trust’s mailing address to his own home address and had Allianz Life send him about $330,000 of Kramer’s annuity assets, according to the complaint.

Kramer argued that Allianz Life should have investigated Neuman’s request for an address change and his move to have the payments go to his own home address.

Kramer is asking the court for statutory damages, economic damages, punitive damages, attorneys’ fees and other relief.

Credit: zolnierek/Adobe Stock

Allison Bell

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