Stephen Cook, a Dallas-based financial advisor affiliated with Triad Advisors, has filed a class action lawsuit against Ohio National Life Insurance Company and its affiliates for cutting trail commissions on annuity contracts with guaranteed minimum income benefit riders. The class is being represented by Cincinnati-based law firm Helmer, Martins, Rice & Popham, Co., L.P.A. and New York-based Sarraf Gentile.
The suit, filed in the Southern District of Ohio, is currently the only pending class action representing all advisors affected by Ohio National’s decision to cut commissions. There are currently two other pending class actions against Ohio National based on similar complaints. Advisor Lance Browning originally brought his class action on behalf of all securities reps in November, but amended his complaint later on, limiting his class to LPL Financial reps. Veritas Independent Partners filed a class action against the insurer on behalf of broker/dealers.
As of yet, none of the proposed classes have been certified by judges.
Ohio National spokeswoman Angela Meehan declined to comment.
In September, Ohio National notified broker/dealers that it was terminating selling agreements as of Dec. 12 and ceasing payments of trail commissions on annuity contracts with a GMIB rider. An Oct. 29 email from Ohio National said the company would offer clients a buyout of their variable annuity contract with GMIBs from Nov. 12, 2018 to Feb. 11, 2019. The firm has tried to replace these contracts with new ones, but several broker/dealers refuse to sign the new ones, according to published reports.
The Cook suit is the latest in a string of legal actions filed against the insurer by both b/ds and advisors. Late last year, Jackson, Miss.-based LPL broker Chris Noone filed suit against Ohio National, claiming breach of contract, unjust enrichment, tortious interference with business relations, promissory estoppel and declaratory relief. A number of broker/dealers, including UBS, Commonwealth Financial Network and RBC Capital Markets, have sued over the lost commissions. Cetera Financial Group filed FINRA arbitration claims in late November.
The suit claims breach of contract, unjust enrichment and declaratory judgment.
“Defendants’ retention of such commissions would be unjust and inequitable because they are the result of efforts expended by Plaintiff and the Class which Defendants seek to retain for themselves,” the complaint says.