By T.W. Budig

Semi-retired Lutheran pastor Edmund Schulz of Apple Valley may have had a prayer answered.

Attorney General Lori Swanson on Monday (Oct. 8) announced the settlement of a lawsuit against Allianz Life Insurance Company of North America — a Minnesota-based company — in which she alleged the company sold ill-suited deferred annuities to senior citizens, sometimes using misrepresentation.

"This is wonderful news," said Schulz, who appeared at the Capitol press conference.

Schulz, 85, explained that he and his wife Ruby, 81, were awaiting news.

According to Schulz's affidavit, the pastor purchased an annuity in the amount of $38,556 from an Allianz representative after attending a seminar at a restaurant in Lakeville in October of 2004, one that included a free dinner.

Schulz purchased a second annuity from Allianz Life for $8,200, one in which Ruby was a co-owner.

Wanted access to the money

But two months after purchasing the policies, Schulz had colon cancer surgery and needed to have access to the money in his accounts.

But under his policies he would not begin receiving a monthly payments until Nov. 11, 2014, Schulz said in the affidavit.

He would then be 92 years old.

To change the annuities would have resulted in penalties — Schulz estimated Ruby and he would lose 25 percent of their money. "We cannot bear the thought of such a loss," he said.

Under the settlement signed by a Hennepin County District Court judge — a settlement not meant to imply that Allianz Life Insurance Company has engaged in or expressed any wrongdoing — a restitution process was established that could impact some 7,000 Minnesota seniors.

Seniors age 65 or older who purchased Allianz deferred annuities between Jan. 1, 2001, and the present will have the opportunity to get a full refund without penalties.

Refund with interest

To those seniors whose purchase of the annuity is deemed unsuitable or based on misrepresentation, a refund with interest will be offered.

In addition, Allianz agrees to put into place more a stringent application process, one that will take into account the seniors need for spending money and size of overall assets.

Some applications will be "red flagged," said Swanson, for further elevated review.

Swanson said the problem of seniors getting into bad financial situations is more than financial — it's a health concern.

Minnesota Attorney General Lori Swanson announces insurance settlement during press conference Monday (Oct. 8).

"This is incredibly stressful," she said.

Swanson hopes the settlement will ripple through the financial services industries, opining that sharper scrutiny by insurance regulators is needed.

Seniors who purchased Allianz deferred annuities during the settlement window will be receiving a letter from the Attorney General's Office explaining the refund procedure.