Deceptive Business Practices
I was the broker of record for a client at the end of a deferred fixed MYGA with Guaranty Life Insurance Company (GILICO). What followed was a clear pattern of bad-faith handling and deceptive business practices.
GILICO provided a surrender form that was fundamentally defective—no instructions and only one signature line, despite multiple owners on the policy. The form was completed exactly as presented and submitted with clear written instructions to process within the 30-day surrender window. It was sent via USPS Priority with tracking.
Two weeks later, GILICO rejected the form by mail (not phone or email), claiming all owners had not signed—despite their own form failing to provide instructions or space for multiple signatures. When I called, I was told to have the second owner sign “anywhere,” confirming their form was inadequate.
The corrected form was resubmitted. Two weeks later—again by mail—it was rejected over a trivial clerical issue (a leading zero in the policy number). At no point did GILICO attempt timely communication. Instead, they relied on repeated delays that systematically consumed the client’s 30-day surrender window.
This was not accidental—it was a clear pattern of delay and obstruction.
A third submission was sent correctly. While it was in transit, and despite already receiving two prior surrender requests proving the client’s intent, GILICO restarted the annuity under new surrender terms.
They then processed the surrender as if it were outside the original window and applied a Market Value Adjustment and early surrender penalties that should never have existed. This is a textbook example of bad faith and deceptive business practices—ignoring documented intent and manipulating timing to impose improper charges.
To make matters worse, GILICO then threatened me, the broker, with reporting to VECTRA and a commission chargeback for issues entirely caused by their own defective process.
Bottom line:
GILICO created the problem with a defective form, intentionally delayed communication to run out the surrender window, and then imposed improper penalties. This was not incompetence—it was bad faith conduct designed to disadvantage the client.