A Minnesota district judge has ruled that the state’s attorney general can proceed with a lawsuit against Aviva USA that alleges the company sold unsuitable annuity products to seniors through deceptive marketing techniques, the Minneapolis Star Tribune reported today.

Hennepin County District Judge Cara Lee Neville last Friday rejected Aviva’s argument that an agreement it reached last year with the Minnesota Commerce Department precluded Minnesota Attorney General Lori Swanson from suing to recover damages on behalf of Minnesota seniors. Under that agreement with the Commerce Department, Aviva had agreed to revise its complaint and suitability procedures for annuity products.

The lawsuit, which was filed on Feb. 7 by Swanson, alleged that Aviva, operating as AmerUs/American Investors, sold unsuitable annuities to seniors and misrepresented, or failed to disclose, the material terms and conditions of the annuities. Undisclosed information included the long surrender charge periods and expensive surrender charges that were associated with the annuities.

The suit also alleged that AmerUs/American Investors sold many annuities in Minnesota through living-trust mills, in which unneeded living trusts were sold to seniors for approximately $2,000 as a means to obtain their personal financial information and sell unsuitable annuities to them.

In her ruling Friday, Neville wrote that the Minnesota Commerce Department agreement required the company to cease certain practices, but “does not address restitution for consumers.”

The judge further wrote, “The attorney general stands in a special position to bring an action on behalf of the senior citizens … and seek meaningful relief …”

A tentative court date of April 27, 2009, has been set for the case, Swanson’s press secretary confirmed.