412i plan get your money back, 2113 views, 9 likes Published on June 18, 2018 Edit article Plaintiffs seek unspecified damages, but they ask the Court to presume that, if the investments had not been made in the FSL annuities, the assets would have been invested in the most profitable alternative investments available to them. As is common in ERISA cases, plaintiffs do not allege what more profitable alternative investments were available, aside from other annuities with comparable returns.
Potential Impact of this Case
We see at least three potential impacts from this new case. First, there is a potential that this class action will spawn a new wave of class actions directed at insurance companies that have sold 412(e)(3) annuities. Although plaintiffs nominally contend that the FSL annuities were unsuitable “as structured,” the complaint reads like a general attack on the suitability of such annuities under any circumstance, and a general attack on the insurance companies who acted as service providers with respect to retirement plans that were funded with 412(e)(3) annuities. Thus, as with the revenue-sharing class actions, where plaintiff’s counsel sued most major insurance company service providers, the Fidelity Life class action could be the first among many filed against the insurance industry.
Second, this lawsuit continues the unrelenting efforts by the ERISA class action plaintiffs’ bar to try to transform insurance companies – mere sellers of retirement products and services – into ERISA fiduciaries. We first observed these efforts in earnest in the revenue-sharing class actions we have defended, and this case appears to continue the trend in which plaintiffs attempt to recast ministerial tasks or sales efforts as fiduciary conduct. The rulings in this case could contribute to the developing body of law regarding what activities can cause entities to qualify as ERISA fiduciaries.
Third, this lawsuit could trigger other non-412(e)(3) lawsuits claiming that other life insurance or annuity-based retirement products and services are “too expensive” or “unsuitable” for retirement plans. We have already observed these same sort of efforts in the ERISA stock drop cases we have defended, in which plaintiffs contend that company stock was unsuitable, and more recently, in some of the plan sponsor revenue-sharing cases, in which plaintiffs contend that certain mutual fund offerings used as investment options are too expensive. This lawsuit could cause the ERISA class action plaintiffs’ bar to look for other types of products for which it could pursue similar claims
412i plan get your money back, 2113 views, 9 likes
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Plaintiffs seek unspecified damages, but they ask the Court to presume that, if the investments had not been made in the FSL annuities, the assets would have been invested in the most profitable alternative investments available to them. As is common in ERISA cases, plaintiffs do not allege what more profitable alternative investments were available, aside from other annuities with comparable returns.
Potential Impact of this Case
We see at least three potential impacts from this new case. First, there is a potential that this class action will spawn a new wave of class actions directed at insurance companies that have sold 412(e)(3) annuities. Although plaintiffs nominally contend that the FSL annuities were unsuitable “as structured,” the complaint reads like a general attack on the suitability of such annuities under any circumstance, and a general attack on the insurance companies who acted as service providers with respect to retirement plans that were funded with 412(e)(3) annuities. Thus, as with the revenue-sharing class actions, where plaintiff’s counsel sued most major insurance company service providers, the Fidelity Life class action could be the first among many filed against the insurance industry.
Second, this lawsuit continues the unrelenting efforts by the ERISA class action plaintiffs’ bar to try to transform insurance companies – mere sellers of retirement products and services – into ERISA fiduciaries. We first observed these efforts in earnest in the revenue-sharing class actions we have defended, and this case appears to continue the trend in which plaintiffs attempt to recast ministerial tasks or sales efforts as fiduciary conduct. The rulings in this case could contribute to the developing body of law regarding what activities can cause entities to qualify as ERISA fiduciaries.
Third, this lawsuit could trigger other non-412(e)(3) lawsuits claiming that other life insurance or annuity-based retirement products and services are “too expensive” or “unsuitable” for retirement plans. We have already observed these same sort of efforts in the ERISA stock drop cases we have defended, in which plaintiffs contend that company stock was unsuitable, and more recently, in some of the plan sponsor revenue-sharing cases, in which plaintiffs contend that certain mutual fund offerings used as investment options are too expensive. This lawsuit could cause the ERISA class action plaintiffs’ bar to look for other types of products for which it could pursue similar claims