Annuity Issuer Unit Sues Majesco Over Agent Relations Software
F&G Life Business Services says it spent $8.3 million and received no new working tools.
An F&G Annuities & Life subsidiary is suing an insurance industry software developer over a system replacement project.
Fidelity & Guaranty Life Business Services said in a complaint filed May 30 in the U.S. District Court for the District of New Jersey that it hired Majesco to help it move to a new distribution management system.
The system was supposed to help F&G handle agent contracting, commission calculations and other agent-related tasks.
The Des Moines, Iowa-based company hoped to get the system running quickly. Instead, F&G said, it has worked with Majesco for more than three years, spent $8.3 million and received no new functioning software.
Representatives from Majesco were not immediately available for comment.
The history: F&G signed a five-year subscription agreement with Majesco in September 2020. F&G agreed to pay the Morristown, New Jersey-based company $800,000 per year.
The companies negotiated a new agreement, with an Aug. 7, 2023, “go live” date, in August 2022. The agreement set a cap of $2,285,193 on project fees and expenses.
The companies agreed to a change request with a price cap of $1,852,600 in September 2022, a project simplification change in October 2022 and another change request in March 2023.
In May 2023, Majesco told F&G that the project timeline would have to be extended to February 2024.
“The proposal noticeably lacked any content addressing how existing technical issues would be resolved or how the costs of the options were derived,” F&G said.
In August, Majesco provided a new change proposal with an additional cost of $2.3 million.
“However, the proposal again lacked specificity,” F&G said.
F&G said it sent Majesco a letter expressing concerns about staffing and deadlines in August.
Majesco pulled its employees off the project in October, then gave F&G a project completion proposal in December.
F&G was dissatisfied with the completion proposal, and it told Majesco that it believed that Majesco had breached the project contract.
In the complaint, F&G has accused Majesco of breach of contract, breach of duty of good faith and negligent misrepresentation. It’s asking for a jury trial.
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