The central lawsuit over Fidelity and Guaranty’s indexed universal life insurance policies was Cressy v. Fidelity Guaranty Life Insurance Company, a California class action filed in Los Angeles County Superior Court (Case No. BC-514340) that accused F&G and its co-defendants of using misleading presentations to sell IUL coverage as an investment. The case settled in 2014, received final approval on January 2, 2015, and cost the company an estimated $9 million in fees, payments, and administration.1SEC. FGL Holdings SEC Filing – Section: Legal Proceedings F&G has faced other litigation since, but Cressy remains the defining IUL case against the insurer.
What the Cressy Class Action Alleged
Filed against F&G alongside Paramount Financial Services, Inc. and Douglas Andrew, the Cressy complaint reached back to IUL sales beginning in 2007. Plaintiffs said the defendants pitched indexed universal life policies as “investments” or “investment plans,” played down the high internal costs of the products, and encouraged buyers to take out mortgages on their homes to fund the premiums. The theory was that customers were being pushed into expensive coverage they did not need on the strength of a sales story the policies could not actually deliver.2Truth in Advertising. Fidelity & Guaranty Life Insurance Class Action3Berger Montague. Exploring Possible Fraud Within Indexed Universal Life Insurance Policies
The claims tracked a pattern that has since become common in IUL litigation across the industry: illustrations that look attractive on paper, agent marketing that frames the product as safe retirement money, and cost structures that only surface once the policy is in force.
The 2015 Settlement Terms
A settlement was reached on April 4, 2014, given preliminary approval that June, and finalized in January 2015. The relief split the class in two. Policyholders whose coverage was still active received a one-year increase of one percentage point in their minimum guaranteed interest rate. Policyholders whose coverage had already lapsed or been surrendered became eligible for a partial refund of the charges they had paid before the policy ended.2Truth in Advertising. Fidelity & Guaranty Life Insurance Class Action
F&G’s later SEC filings put the total tab at about $9 million as of mid-2016: $5 million in legal fees, $3 million in settlement payments, and $1 million tendered to a settlement administrator for a claim review fund. The company recovered $4 million of that from OM Group (UK) Limited under a separate indemnification agreement covering defense and settlement costs.1SEC. FGL Holdings SEC Filing – Section: Legal Proceedings
What Happened to F&G’s Co-Defendants
The other names on the Cressy caption ran into deeper trouble after the settlement. In December 2018, the SEC charged Paramount Financial Services (doing business as “Live Abundant”) and 13 individual defendants, including Aaron R. Andrew, with acting as unregistered brokers in the sale of securities tied to the Woodbridge Group of Companies, which the agency described as a $1.2 billion Ponzi scheme. The defendants were accused of selling more than $350 million in unregistered Woodbridge securities to over 4,400 investors.4FIP Lawsuit. SEC Announces Charges Against Live Abundant
In January 2021, the SEC obtained final judgments ordering Live Abundant to pay roughly $850,664 in disgorgement, interest, and penalties, and Aaron Andrew about $231,128. The Idaho Department of Finance separately pursued Douglas Andrew, Paramount, Aaron Andrew, and several associates over the sale of unregistered securities to Idaho residents.5Idaho Department of Finance. Administrative Complaint – Docket No. 2017-7-15-F Those actions do not involve F&G directly, but they concern the same distribution channel that sold the policies at issue in Cressy.
Earlier Related Case: The Pina Annuity Class Action
The IUL suit was not F&G’s first brush with an illustration-based sales case. In Fidelity and Guaranty Life Insurance Company v. Pina (No. 13-04-008-CV), Texas plaintiffs alleged that F&G lured buyers into its “Maximus” 403(b) fixed annuities with “teaser” interest rates averaging around 7.25 percent, without disclosing that the rate would drop to between 3.5 and 4 percent after the first year. The suit brought claims under the Texas Deceptive Trade Practices Act and the Texas Insurance Code along with common-law fraud and negligent misrepresentation.6FindLaw. Fidelity and Guaranty Life Insurance Company v. Pina
A Texas trial court certified a class of purchasers across five states in 2003. In April 2005, the Corpus Christi Court of Appeals reversed, ruling that plaintiffs had not shown that common issues predominated over individual questions of reliance, and sent the case back for further proceedings.6FindLaw. Fidelity and Guaranty Life Insurance Company v. Pina Pina is an annuity case rather than an IUL case, but the theory of the lawsuit — that first-year numbers oversold what the product would actually pay over time — is the same one Cressy carried a decade later.
How These Cases Fit the Wider IUL Litigation Trend
Suits against IUL carriers across the industry tend to share three complaints: illustrations that project returns the policy cannot sustain, agent marketing that presents the product as a safe or tax-free retirement vehicle, and back-tested historical returns that never materialize in real markets.7Insurance News Net. Top 5 Life Insurance Stories: IUL Takes Center Stage as Lawsuits Pile Up
One recent headline case is Kyle Busch v. Pacific Life Insurance Company, in which the NASCAR driver alleged he paid $10.4 million in premiums for IUL policies sold as self-funding and tax-free, then took more than $8.58 million in net losses because of undisclosed costs and misleading illustrations.7Insurance News Net. Top 5 Life Insurance Stories: IUL Takes Center Stage as Lawsuits Pile Up
Regulators have moved in the same direction. The NAIC’s Actuarial Guideline 49-A, which controls how insurers illustrate IUL performance, was updated in 2023 to tighten illustration limits and again in 2026 to require enhanced consumer disclosures. As of March 2026, NAIC regulators have flagged index annuity disclosures that suggest annual returns of 10 to 25 percent and questioned whether such projections give consumers reasonable expectations.8NAIC. Life Insurance Illustrations
Other F&G Lawsuits That Are Not IUL Cases
If you are researching F&G’s legal record more broadly, a few recent matters come up that do not involve indexed universal life policies. In 2023, F&G was named in Hanson v. Fidelity & Guaranty Life Insurance Company (Case No. 4:23-cv-294) in the Southern District of Iowa after a cyberattack exploiting the MOVEit file-transfer application exposed personal information of more than 873,000 individuals. That case was transferred into MDL No. 1:23-md-03083, described as the largest data breach multidistrict litigation in history.9Bloomberg Law. Fidelity & Guaranty Hit With Class Suit Over MOVEit Data Breach10SEC. F&G Annuities & Life SEC Filing – Section: Legal Proceedings
F&G has also been on the plaintiff’s side. In October 2020, the company filed a $40.3 million adversary proceeding in U.S. Bankruptcy Court against former New York broker Leon Lowenthal, alleging he ran a rebating scheme between 2015 and 2017 that used sham trusts to fund first-year premiums on policies that were then allowed to lapse, letting him keep the difference between first-year and renewal commissions.11Westfair Online. Rockland Broker Accused of $40.3 Million Insurance Fraud12Insurance Business Magazine. Insurer Slaps Former Broker With $40.3 Million Lawsuit And in May 2024 the company sued technology vendor Majesco Corporation over an $8.3 million distribution management software project it says never delivered working software.13ThinkAdvisor. Annuity Issuer Unit Sues Majesco Over Agent Relations Software
None of those matters concern the IUL policies themselves. For consumers looking at the sales-practices question, Cressy remains the case on point, and Pina is the closest analog in the company’s earlier annuity history.