Attachment II: Living Trust Mills &
Pretext Interview Notice (Continued)
In 1997, the People of the State of California, represented by the Attorney General and a number of district and city attorneys, sought civil penalties, restitution, and injunctive relief against Fremont Life Insurance Company and others, including a corporate licensed life agent and several individual licensees, in an action alleging unfair business practices and false advertising under California Business and Professions Code sections 17200 and 17500.
The specific allegations of the Complaint were that the insurer, the advisers and others, operated a "living trust mill" in which the advisers, posing as experts in estate planning, marketed an estate plan to senior citizens in the manner described above. It was alleged that the concealed, material purpose for an estate planning interview conducted by the advisers was to obtain personal financial information from clients in anticipation of the sale of a Fremont Life Insurance Company annuity, and receipt of the commissions generated by the sale.
Where clients agreed to purchase the estate plan, the advisers prepared standardized trust documents, and delivered them to the purchasers for execution during subsequent appointments. Typically, the advisers would solicit the clients for the purchase of the annuity during the delivery and execution process.
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