Background
Quin Briscoe purchased an annuity in nineteen ninety-six with the intent to liquidate it upon retirement rather than annuitize it. In two thousand and twenty-two, after reaching her sixty-fifth birthday, Transamerica Premier Life Insurance Company annuitized her contract and began disbursing payments under a default option found in the original prospectus. Briscoe sued, arguing the annuitization was invalid because she never selected a payment option. The district court agreed, ordering the company to reverse the annuitization.
The court’s reasoning
The Eleventh Circuit held that the contract was not ambiguous and that the owner, not the insurance company, had the exclusive right to select the annuity payment option. The court found that the contract did not integrate the prospectus’s default payment method. Furthermore, the court determined that selecting a payment option was a condition precedent to the insurer’s obligation to annuitize, as it was impossible to calculate payments without that selection. The court rejected the argument that the owner must provide thirty days’ notice before the default annuity date to defer it, interpreting the clause to require notice only before a requested new date.
The dissent
What it means going forward
The ruling reinforces that insurance companies cannot rely on prospectus defaults to override explicit contract terms granting owners sole discretion over annuity options. It clarifies that annuitization cannot occur until the owner has affirmatively selected a payment method.