by John Darer® CLU ChFC MSSC CeFT® RSP CLTC
What was the Aviva Structured Settlement CMA Class Action all About?
This Aviva Structured Settlement class action was brought on behalf of several thousand Americans who between 2002 and 2009 became the beneficiaries of Structured Settlement Annuities (“SSAs” or “the Annuities”) issued by what was then Aviva Life Insurance Company (or its predecessor) and Aviva Life Insurance Company of New York (or its predecessor), both of which were during that period subsidiaries of Aviva plc (or its predecessor) , a British corporation based in London, England. The Annuities were backed by a Capital Maintenance Agreement (" CMA") issued by CGU, which was
at that time also an Aviva plc subsidiary. The CMA required CGU to ensure that the entity responsible for making payments under the Annuities had sufficient assets to do so. Aviva ceased selling SSA’s in 2009.
Aviva produced sales brochures and issued thousands of policies that misrepresented the CMA to it's own appointed agents and to consumers that the CMA "... obligation shall be absolute, unconditional, present and ongoing" and authorized its agents to distribute them to consumers, their attorneys and to judges in infant compromise hearings. It was an outrageous act of deception. Fortunately there now is a happy ending. Upon information and belief, Aviva collected in excess of $1 billion in premium from 2002-2009 while concealing material facts about the actual CMA from its appointed agents, consumers and even its many of its own employees that interfaced with its agents. In the opinion of this author, had the facts concealed by Aviva been known, a lot of annuity business would not have been placed with Aviva.
In 2012 Aviva agreed to sell its entire North American business to Athene Holding Ltd. ("AHL"). Shortly before that transaction closed on October 2, 2013,
the parties to the CMA (which at that time were both subsidiaries of Aviva plc) agreed to modify it to permit termination, and then to terminate
it effective upon the closing. Annuitants were not noticed.
Defendants Point Fingers At Each Other
Aviva asserted that it acted within its rights, and pursuant to the terms of the CMA (the full details of which again, were deliberately concealed from annuitants and its agents and many front line employees by being omitted from its CMA brochure) and applicable law, by taking these steps to terminate the CMA with AHL’s knowledge in connection with the sale of Aviva’s US operations to AHL.
The Athene Defendants asserted that they did not know that Aviva had modified and terminated the CMA until after the October 2, 2013 closing, and that they did not agree to Aviva’s modification and termination. Defendants contend further that, in light of various steps they took to ensure the solvency of the Athene entity that would be responsible for making payments on the Annuities after October 2, 2013, the Plaintiff and putative class was not damaged by
the modification and termination
Plaintiff denies both of these propositions. Plaintiff maintains that the termination of the CMA was improper and that no actions taken by
Defendants prior to the institution of this Action adequately protected Plaintiff, and members of the putative class, from the negative impact of the termination of the CMA.
Terms of Settlement
- Requires Athene Defendants to create a new Capital Maintenance Agreement which replicates, and then improves upon, the terms of the CMA whose purported cancellation is at issue in this case. This new CMA will be backed by Athene Holding Ltd., the ultimate, publicly traded, corporate parent of all other Athene Defendants. Plaintiffs' expert has opined that the entity that will issue the new CMA is better capitalized than CGU.
- It provides cash relief in amounts totaling at least $7.3 million.
- It requires Defendants to pay the costs of notice and settlement administration up to a total of $200,000 (up to $100,000 for each of the Athene and Aviva
Defendants), as well as up to an additional $12,500 from each Defendant group for a service award, if approved by the
Court, to be paid to the named Plaintiff, John Griffiths.
- It provides for an additional payment by Aviva of 25% of any amount it obtains in resolution of any claim it files against the Athene Defendants for indemnification in connection with the acts at issue in the Amended Complaint.
The Settlement Class
All beneficiaries of structured settlement annuities assigned to Athene London Assignment Corporation (formerly known as Aviva London Assignment Corporation and as CGNU London Annuity Service Corp.), which includes all annuities covered by the Capital Maintenance Agreement between CGU International Insurance plc and CGNU London Annuity Service Corp. dated February 1, 2002, where such annuities remained in force as of October 2, 2013.
Excluded from the proposed class are the officers and directors of any Defendant and members of their immediate families and any entity in which any Defendant has a controlling interest, the legal representatives, heirs, successors or assigns of any such excluded party, the judicial officer(s) to whom this action is assigned, and the members of their immediate families.
John W. Griffiths, on behalf of himself and all others similarly situated, Plaintiff v Aviva London Assignment Corporation, Aviva Life Insurance Company, Aviva International Insurance Ltd f/k/a CGU International Insurance, plc, Athene Holding, Ltd, Athene London Assignment Corporation and Athene Annuity and LIfe Company, Defendants United States District Court for the District of Massachusetts Civil Action 15-cv-13022-NMG
Read my coverage about Aviva Structured Settlements