Variable Annuity - A License to Steal? Unsafe at Any Speed?

Stockbroker Law - Tuesday, October 11, 2011
Variable Annuity - A License to Steal? Unsafe at Any Speed?

In the past several years, we have seen the theft of millions of dollars of contractual benefits, assets, and coverages from variable annuity contracts issued by prominent, multi-billion-dollar financial services and insurance conglomerates, such as The Hartford and Nationwide Life Insurance Company.  The scheme of the now-convicted felon and Appointed Agent for Hartford Life Insurance Company and Nationwide, one Matthew J. Ryan, exploited numerous weaknesses in the operations, administrative, supervisory, compliance, and securities-related procedures at The Hartford and Nationwide, which went undetected for well over five years.

The first step of this scam included a form which the clients were asked to sign for the purpose of transferring, distributing, surrendering, and/or rolling over funds from Nationwide or The Hartford to new companies (American Integrity and Prime Rate and Return).  The transfer forms were sketchy at best, containing numerous grammatical errors, and were otherwise non-regulatory and non-compliant.  Further yet, these two bogus companies were clearly not authorized to accept funds in a trustee-to-trustee transfer required for subject IRA/qualified account-type transactions in question. (http://www.irs.gov/pub/irs-tege/nonbank_trustee_list.pdf).

Notwithstanding thousands of transactions and events, The Hartford and Nationwide, companies, for which now-convicted felon Matthew J. Ryan served as an Appointed Agent, repeatedly honored the bogus transfer documentation without detection until the late spring of 2010. 

Are your variable annuities safe?  Certainly not, if you presently hold a variable annuity subject to the same fraud, administrative, operational, compliance and supervisory review processes, procedures, and practices followed by The Hartford and Nationwide.

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