The 11/09/99 Wall Street Journal reported that lawyers are suing variable annuity companies for fraudulent sales practices.

In general, I'm not a big fan of these class action lawsuits, but this may be a case where these "sharks" are actually doing the Lord's work.

<<excerpt>>

Class-action lawyers, fresh off victorious multibillion-dollar settlements
with life insurers over allegedly fraudulent life-insurance sales practices,
are taking aim at the industry again.

This time, they're targeting another sales practice, the sale of annuities
within tax-deferred accounts. Their beef? Annuities, which are part
insurance and part investment product, already have tax-deferred status,
because investment earnings in them aren't taxed until the investor begins
cashing out his contract.

So putting annuities into a tax-deferred account provides a benefit that is,
in effect, of no value to most investors -- even though investors are
charged higher fees for annuities in part because of the purported tax
advantages, these lawyers say. "Everybody who buys this product" in a
so-called qualified retirement plan "is being had," maintains Melvyn Weiss,
an attorney with Milberg Weiss Bershad Hynes & Lerach, a class-action law
firm that helped reach numerous settlements totaling billions of dollars
over allegedly deceptive sales of whole-life insurance.


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