The Education Code requires disclosure of certain information by vendors offering “tax-deferred retirement investment products as described in [s]ection 403(b) of the Internal Revenue Code of 1986” (403(b) products) to public education employees. (Ed. Code, § 25100, subd. (a).) The Education Code mandates this information, which is separate and distinct from any disclosures required by securities and insurance law or by self-regulatory organizations such as the Financial Industry Regulatory Authority (FINRA), be posted on a website maintained by the Teachers’ Retirement Board (board). The code further prohibits a vendor from charging any fee to a public education employee which the vendor is required to, but did not, disclose on the state-maintained website. The Education Code indisputably requires these website disclosures be made to prospective purchasers of an offered 403(b) product. The question here is whether the website disclosure requirements continue to apply to an optional add-on rider for a 403(b) product after that optional rider is no longer offered to prospective purchasers, but the rider is still in force for those who selected it when it was available.
Metropolitan Life Insurance Company (Met Life) offers 403(b) products to public education employees, including its Financial Freedom Select (FFS) variable annuity. In 2010, Carolyn Jacobson purchased an FFS variable annuity. Although the income stream from a variable annuity typically depends on the performance of underlying investment options, Jacobson purchased with her annuity a Guaranteed Minimum Income Benefit (GMIB) rider, which guarantees minimum levels of payment from her annuity regardless of the annuity’s investment performance. That optional guarantee came at a cost, and Jacobson paid Met Life an annual fee based on the value of her annuity for the protection afforded by the GMIB rider.
At the time Jacobson purchased her variable annuity in 2010, Met Life disclosed the annual fee for the GMIB rider option, and the information was published on the state-maintained website as required by the Education Code. Years later, in 2018, Met Life continued to offer the FFS variable annuity but stopped offering the optional GMIB rider to new customers; individuals such as Jacobson who previously purchased the GMIB rider continued to have its protection and continued to pay the associated fee. At some point after January 27, 2019, information about the GMIB rider fee was no longer included on the state-maintained website.
In June 2023, Jacobson sued Met Life under the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.), asserting Met Life was required to disclose the GMIB rider fee for posting on the state-maintained website even after it ceased offering the rider to new customers. Jacobson did not claim to have relied on the website nor to have been misled about the fee she was being charged; she instead claimed that Met Life had engaged in an unlawful business practice by charging the fee when it was not disclosed on the website, and that she had stated a viable claim for relief regardless of her lack of reliance on the website. The trial court sustained Met Life’s demurrer based on the lack of alleged reliance; the court later dismissed the action with prejudice when Jacobson declined to amend her complaint to allege reliance on what the website stated or did not state.
We affirm, but for a different reason. We conclude the Education Code did not require Met Life to continue to disclose the GMIB rider fee on the state-maintained website after Met Life stopped offering that option to prospective purchasers. Therefore, Met Life was not prohibited from charging the fee to Jacobson after that time. Accordingly, Jacobson’s complaint, which is premised on the theory Met Life charged her an illegal fee, was properly dismissed.
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