Judge Recommends Throwing Out Ohio National’s Motion to Dismiss Class Action

Judge Stephanie Bowman for the Southern District of Ohio recommended that a motion by Ohio National Life Insurance to dismiss a class action lawsuit against it involving the termination of trail commissions on certain variable annuities be denied, according to court documents.

The decision involves a class action suit filed in March by Stephen Cook, a Dallas-based advisor affiliated with Triad Advisors, also recommending that the case be consolidated with a similar one against Ohio National brought by Lance Browning, an advisor with LPL Financial, in November. In a separate report, Bowman also rejects the insurer's motion to throw out the Browning case. In both cases, Ohio National has 14 days to object to the recommendations, or they will become final.

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. The firm has tried to replace these contracts with new ones, but several broker/dealers refused to sign the new ones, according to published reports.

Cook is suing 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. Cook's is the only pending class action suit against Ohio National on behalf of all registered reps.

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.

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