The California Superior Court has thrown out a civil suit that alleged Waddell & Reed Financial had improperly advised variable annuity holds to convert their policies as part of a scheme to increase its commissions.
The suit, which the court dismissed with prejudice, was filed by United Investors Life Insurance Company (UILIC), a subsidiary of Torchmark Corporation, in October 2001.
Torchmark spun off Waddell & Reed in 1998 and after that time the brokerage firm began converting UILIC variable annuities to new variable annuities issued by Nationwide. Whether those conversions were proper turned into a legal battle in 2000. In March, UILIC won a judgment for 45 million in punitive damages in a similar suit brought in Alabama. Waddell & Reed has appealed in that case.
UILIC has said that it plans to appeal the California ruling within a thirty-day window for appeals.
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