War of words over equity index annuity

Aug 25, 2006 @ 12:01 am

By Gary S. Mogel

An annuity marketing group is demanding that a rating firm retract damaging statements about the group and its new equity index product.

The Annexus Group in Scottsdale, Ariz., which comprises a dozen "independent marketing organizations," this month sent a cease-and-desist letter to Premium Producers Group LLC in Santa Ana, Calif., a developer of software that evaluates and grades equity index annuities.

Annexus alleged that Premium Producers issued opinions and ratings of its new BalancePlus annuity that were "false, libelous and defamatory," and violated federal unfair-competition laws.

The annuity is issued by American Investors Life Insurance Company Inc. of Topeka, Kan. Premium Producers' software incorrectly concluded that the annuity had poor historical returns and crediting methods, according to attorney Mark Chester, a principal with Chester & Shein PC in Scottsdale, the law firm representing Annexus.

But Mitchell Maynard, founder of Premium Producers and the developer of the rating software, said that Mr. Chester is "misinformed" and that Annexus is being "disingenuous" about the review of the BalancePlus annuity.

"Our statements and review are true," Mr. Maynard said. "An unflattering review does not constitute falsification, libel or defamation."

Annexus is demanding that Premium Producers retract its ratings and reviews of the annuity, as well as allegedly disparaging comments made about Annexus on its website.

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