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With annuity sales down, Allianz cuts 100 workers
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Allianz Life Insurance Co. of North America has laid off about 100 employees, due in part to a decline in the sale of its annuities, some of which have come under fire in recent years.
The company, a subsidiary of German financial giant Allianz AG, said the cuts amount to 4 percent of the positions at its Golden Valley headquarters. Another 40 job openings have been eliminated, and an unspecified number of temporary jobs also were cut.
Affected employees, notified Tuesday, received severance packages based on years of service; the minimum severance was 12 weeks of pay plus unused vacation.
"We, like many companies, are being impacted by the economic slowdown and the acute downturn in financial services," said Allianz spokeswoman Juli Wall. "Basically, we're reducing our headcount to make sure we're staffed at an appropriate level to support our business in the current environment, and going forward."
This marks the second time in two years that Allianz has made significant layoffs in Golden Valley. In 2006, the company announced 200 layoffs after new rules governing how annuity products are sold through securities firms contributed to a slowdown in the sale of its equity-indexed annuities. Allianz is one of the nation's largest sellers of annuities, or contracts in which a person pays a lump-sum premium to an insurance company in return for periodic payments.
Allianz and other large insurance companies have come under scrutiny for the way they sell annuities to older people.
In February, Allianz Life paid $10 million to settle charges that it sold unsuitable annuities to thousands of senior citizens in California. And last fall, in a settlement with Minnesota Attorney General Lori Swanson, Allianz agreed to return money to about 7,000 senior citizens who had purchased annuities since 2001. In both cases, Allianz agreed to strengthen the way it reviews annuity applications.
Allianz Life now employs about 2,300, down from 2,700 two years ago.
Chris Serres • 612-673-4308
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