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Ohio National Refusal to Pay Variable Annuity Commissions Class Action

When a person or firm is laid off, what happens to any unpaid commissions they might have earned? The complaint for this class action says that Ohio National Life Insurance and related companies simply stopped paying the insurance commissions to securities representatives when it terminated its selling agreements with their companies. The complaint calls this breach of contract and unjust enrichment.

The defendants in this case are a group of related companies: Ohio National Life Insurance Company, Ohio National Life Assurance Corporation, Ohio National Equities, Inc., and Ohio National Financial Services, Inc. Among the products they sell are variable annuities.

Variable annuities are complex products. Buyers make either a lump initial payment or payments over time, and at a later date, the annuity begins making payments to the buyer. Because they are so complex, they are considered securities. 

Ohio National must therefore sell them through broker-dealer firms. It enters into a Selling Agreement with the firm. A securities representative affiliated with the firm then advises consumers about the variable annuity and makes the sales, according to the requirements of securities rules and regulations. 

When a customer buys a variable annuity from the broker-dealer firm, Ohio National’s Selling Agreement says it must begin paying the firm and its representative a commission. The commission is paid on a regular basis until the customers sell the variable annuity or begin to take payments from it. Ohio National can also stop paying commissions if the agreement is ended for cause.

However, the complaint claims that Ohio National recently “unilaterally terminated the vast majority of its Selling Agreements, without cause” and stopped paying the commissions owed to the broker-dealers and their representatives had sold. 

Ohio National has the right to tell broker-dealers and their representatives to make no more sales of its products, but the complaint claims it does not have the right to stop paying the commissions that were earned in previous sales. 

The complaint points out that the customers who bought the variable annuities will not pay less because the commissions have been stopped. Ohio National, it says, simply keeps the money for itself.

The complaint alleges breach of contract and unjust enrichment.

The class for this action is all securities representatives who

  • Sold an individual variable annuity with a guaranteed minimum income benefit rider pursuant to a Selling Agreement between defendants and broker-dealers, where the annuity had not been surrendered or annuitized by December 12, 2018,
  • Received a commission from the sale in the form of trail commissions, and
  • Stopped received the trail commissions because of the defendants 2018 decision to terminate the Selling Agreement.
Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Ohio National Refusal to Pay Variable Annuity Commissions Complaint

March 11, 2019

When a person or firm is laid off, what happens to any unpaid commissions they might have earned? The complaint for this class action says that Ohio National Life Insurance and related companies simply stopped paying the insurance commissions to securities representatives when it terminated its selling agreements with their companies. The complaint calls this breach of contract and unjust enrichment.

ohio_natl_life_ended_commissions_compl.pdf

Case Event History

Ohio National Refusal to Pay Variable Annuity Commissions Complaint

March 11, 2019

When a person or firm is laid off, what happens to any unpaid commissions they might have earned? The complaint for this class action says that Ohio National Life Insurance and related companies simply stopped paying the insurance commissions to securities representatives when it terminated its selling agreements with their companies. The complaint calls this breach of contract and unjust enrichment.

ohio_natl_life_ended_commissions_compl.pdf
Tags: Breach of Contract, Securities, Unfair or Unlawful Clawbacks of Commissions