The rollover from one IRA to another is not the problem.  Usually these are done trustee to trustee, when they are annuities, but that isn't a requirement.  The problem is depositing another $50,000 in cash that did not come from an IRA rollover.  She can just keep paying the $3,000 annual penalty until she figures out a way to put the toothpaste back in the tube.  

This is not the fault of the new annuity company, but they could solve the problem just by breaking the one contract into two contracts with identical terms.