A review looked at issues including whether certain products were suitable for customers who bought them.
Allianz Life Insurance Co. of North America has agreed to pay $10 million and refund eligible customers after a regulatory review of certain annuity sales the Golden Valley-based company made from 2001 through 2008.
The agreement, struck in August, involves 43 states and covers more than two dozen fixed annuity products Allianz Life sold during the eight-year period, according to the Minnesota Department of Commerce, which announced the agreement Thursday.
Minnesota's share of the $10 million penalty is expected to be about $346,100.
The multistate review was part of a routine conduct market review that started after Allianz Life agreed to pay $10 million in 2008 to settle charges by the California Department of Insurance that it targeted thousands of seniors in heavy-handed and deceptive annuity sales.
The examination also looked at how suitable the two-tiered annuities were for customers but was much broader and examined such things as how Allianz marketed and sold the annuities and how it handled customer complaints about them.
While not a particularly large fine as multistate settlements go, the agreement has broader impacts. Allianz Life also agreed to change the way it markets the so-called two-tiered annuities, and to set up a process for reviewing new complaints about them and re-examining old complaints previously filed under new guidelines. The company will issue complete refunds where appropriate.
In a statement, Allianz Life said it was pleased that the agreement contained no allegations of wrongdoing and requires only "minor modifications" to its practices.
"Although we could have continued to dispute the penalty, we would have lost the opportunity to resolve the matter on a large-scale basis," the company said in the statement.
Annuities are insurance products often used for retirement that can, depending on the type, offer a stream of income. The two-tiered variety has different values -- higher when the premium and interest is left alone with the company for a certain number of years and then paid out in installments, and a lower surrender value if the money is withdrawn in a lump sum.
They have had a problematic history. Utah, for instance, has effectively prohibited the sale of them and many insurance carriers have pulled the products.
In the 2000s, the investments were the subject of a prolonged legal battle between Allianz Life and more than 300,000 customers in a certified class-action lawsuit. A federal jury in Minneapolis in 2009 ruled that while the company used deceptive sales practices in selling certain two-tiered annuities that offered bonuses, no damages were being awarded because no one was directly harmed.
Minnesotans who bought the eligible products between January 2001 and the end of 2008 may be eligible for a full refund of premiums, according to the Minnesota Department of Commerce. Allianz has agreed to re-evaluate complaints customers previously filed, based on standards laid out in the agreement.
The deadline for new complaints is March 31, 2013. People with questions or concerns can contact Allianz at 866-604-7488 or by using the "contact us" feature on the Allianz Life website.
Jennifer Bjorhus • 612-673-4683