BakerHostetler Health and Life Annuity Company has been sued for the wrongful death of plaintiff James Baker.
The complaint alleges that BakerHostetler purchased BakerHostetler’s annuity, transfer, and portable funds for profit and unlawfully used the funds to procure lower-quality coverage for its product.
The annuity would have involved the sale of a new life annuity to BakerHostetler’s insurance agent and on-call provider for clients, and the agent was, in effect, receiving a prepayment fee for the annuity’s sale.
The lawsuit alleges that BakerHostetler knew that it did not want its new annuity to be required to cover the product’s premium up front. Instead, the suit claims, the product was sold as a “replacement” product, which carries no pre-financing and requires no prepayment.
The lawsuit further alleges that the premium-only annuity delivered by BakerHostetler “coined” the term “replacement,” but that the product was not fully replacement. This constituted “apparently unequal treatment”, according to the suit.
BakerHostetler worked with the Berkshire Life Insurance Company, with which BakerHostetler is in the process of merger, to deliver the annuity to BakerHostetler’s insurance agent and on-call provider.
In November 2011, the policyholder’s insurer, Berkshire Life, was sued by a 26-year-old woman who claimed that she paid a $300 premium premium, only to discover that the annuity no longer covered her original product.
By the time the company’s agent was contacted by this paper, the policyholder had withdrawn her policy and moved to another insurer, and the annuity had effectively been replaced.
The lawsuit does not state whether this would have been an adequate replacement for the product it replaced.
Moreover, despite what the suit alleges, and despite what the insured said to the terms of the contract, there is no record that BakerHostetler provided any explanation as to why the annuity was not adequately fulfilling its contractual obligations.
The lawsuit seeks punitive damages of at least $25,000, plus statutory damages and prejudgment interest.
The suit is registered with the New York State Supreme Court in New York City as a preliminary complaint.
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