Copyright: | (c) 2011 A.M. Best Company, Inc. |
Source: | A.M. Best Company, Inc. |
Wordcount: | 447 |
A
The dispute concerns the creation of a segmented asset account by the company for these annuities under the change in 1985.
The court trial started in November at the
Since 1985, the annuitants have not received an equitable share of Northwestern Mutual’s divisible surplus as dividends, wrote Milwaukee County Reserve Circuit Judge
Northwestern Mutual is “shocked at the court’s ruling, and we plan to appeal the decision. There are numerous grounds for appeal, including the fact that the court simply ignored important evidence in its decision,” it said in a statement.
Any information about a dollar amount of damages “is pure speculation,” the company said.
“This is just a case of one group of customers wanting more than their fair share of the dividends we pay,” Northwestern Mutual said. “The plaintiffs bought an annuity that promised a certain minimum guaranteed return. It has paid that and more in the form of dividends for decades.”
Northwestern Mutual said that as a mutual company, “we have no motivation for depriving any one group of policyowners of their rightful allocation of dividends. We are just looking out for what is fair for all our policyowners.”
Northwestern Mutual was required by law to determine the divisible surplus of the company, divide it among policyholders and credit to each annuitant a dividend of that divisible surplus, Flynn held.
“Nowhere does the law say that the dividend or divisible surplus is to be paid from a segmented account within the general account portfolio,” Flynn wrote.
Northwestern Mutual said the annuities were long-term retirement investments that would grow over time from dividends paid to the annuitants that would be based on earnings made by its general account portfolio. The dividends were paid this way until the 1985 change.
“We have only one divisible surplus, one pot, from which to allocate dividends,” the company said. “The action we took was reviewed closely by regulators who raised no concerns about it.”
(By
More Articles