Attachment II: Living Trust Mills &
Pretext Interview Notice (Continued)

The lawsuit against the insurer proceeded to trial in Los Angeles Superior Court in early 1999; the production advisers' having previously stipulated to a final judgment that included civil penalties and restitution.

On October 27, 1999, the court filed its Statement of Decision in favor of the People and against Fremont Life Insurance Company. In making affirmative findings with regard to each of the above-recited allegations, the court made the following significant determinations:

• The insurer was involved in and responsible for the unauthorized practice of law by its advisers in marketing the estate plans.
• The insurer was engaged in an unfair, fraudulent and deceptive business practice in the marketing of its annuities where, pursuant to training practices known to the insurer, its advisers:
  • Misrepresented that they were advisers on matters of estate planning through the use of inter vivos trusts, rather than salespersons who had the ultimate goal of selling annuity policies to customers.
  • Misrepresented that the firm was an organization of senior citizens or an organization which functioned on behalf of senior citizens, rather than an insurance sales organization.
• The insurer was responsible for the acts of its advisers, not only under the theory of firm, but that of ratification for accepting the substantial benefits of the unlawful acts of its salespersons.

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