State Insurance Commissioner Diane Koken has reached a settlement that requires the brokerage firm Waddell & Reed to pay $11 million in restitution to consumers nationwide whose variable annuities were switched from one product to another. The Pennsylvania Insurance Department estimates that 150 consumers were affected. “Some Waddell & Reed producers violated consumers’ trust by deliberately campaigning to switch customers from one variable annuity to another,” Koken said. “These recommendations were made without regard to the customers’ best interests and ultimately cost consumers money in surrender fees.”
The settlement was coordinated through the National Association of Insurance Commissioners and involves several state insurance and securities regulators.
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