Posted by (American Life InsuranceGuide Net News)Transamerica(Pan American Life, Also translated as "American Life") The life insurance company is about to pay 1.95 million US dollars to settle a class action lawsuit. The allegation claims that Transamerica improperly treated 7Universal insuranceThe premium of the policy has risen.
Promise can not be fulfilled?Sudden increase in policy price triggers litigation
The attorney representing the plaintiff, Harvey Rosenfeld from the consumer watchdog agency said,Transamerica(Pan American Life, Also translated as "American Life”）在2015年，通知在20世纪80年代末(1980s)和90年代初(1990s)购买万能寿险保单的客户，他们的保费将增加38％。
Rosenfeld said this means that some policyholders who are about to retire are forced to make a choice, either to lose the policy or pay higher premiums.This policy initially promised to pay at least 5.5% annualized income per month.
"TransamericaThe sudden price increase surprised the people who received these notices and put them under tremendous pressure.Most of them are elderly, some of them are very old and live on a fixed income. "He said in a statement.
Universal Life Insurance Policy(Universal life, UL) This product allows policyholders to make flexible premium payment and maintain the policy at a lower premium.Many insurance policies were sold during an era when market interest rates were high. At that time, in order to compete for customers, insurance companies offered very attractive guaranteed minimum interest rates.
The plaintiff stated that the insurance company intends to squander its debts and make up for its own losses at the expense of the insured
Transamerica(Pan American Life, Also translated as "American Life") said in a statement that the policy stated that the company was allowed to adjust monthly fees within a maximum range. It also claimed that the increase was "necessary."Because of the long-term low interest rate factors, changes in mortality data and other factors, and it is also in line with the contractual terms of the insurance policy. "
However, the plaintiff argued thatTransamerica(Pan American Life, Also translated as "American Life") Violated the contract and acted in bad faith (Acted in bad faith), with the intention of increasing the price to deny or reduce the monthly insurance policy interest promised. The plaintiff’s lawyer also claimed that,TransamericaIt is hoped that the insured will give up the policy so that the company can make up for the losses suffered due to the low market interest rate.
In addition to the consumer watchdog lawsuit, the case was also sued by two law firms specializing in life insurance lawsuits: Bonnett Fairbourn Friedman & Balint and Sheernoff Bidart Echeverria & Bentley.
The struggle between the policyholders and the lawyers ushered in victory
Rosenfeld said: "Our primary goal is to help policyholders get as much money as possible in a short period of time." "After two years of arduous litigation, we have achieved our goal."
According to the terms of the settlement,Transamerica(Pan American Life, Also translated as "American Life") will pay the common costs and bear all attorney fees. Policyholders who participate in the group litigation will receive monetary rewards-they can choose to pay to the cash value of the policy, or take cash directly (invalidation of the policy) Circumstances)-And within five years, Transamerica may not add any additional monthly deductions.
Transamerica(Pan American Life, Also translated as "American LifeDick, a senior spokesperson for the parent company Aegon (Netherlands Global Life Group), said that the company is satisfied with the settlement, and the uncertainty felt by customers has thus come to an end.
Legal litigation and government supervision are carried out simultaneously, and financial and insurance companies face compensation or heavy fines
OnAmerican Life InsuranceGuide online week’s report ("The Universal Insurance (UL) lawsuit involves many well-known insurance companies"),AXA Life Insurance(AXA) andLincoln Life Insurance(Lincoln National Corp) These two companies are also facing the same lawsuits because of unilateral price increases.National Life (Nation-wide) In May of this year, privately reconciled with its subordinateInvestment-oriented universal life insurance(Variable Universal Life,VULFor cost-related matters, John Hancock Life Insurance Co. (U.S. Hengkang Life Insurance Co.) spent US$7 million in July to settle a legal action.
In August, the US Securities and Exchange Commission (SEC) orderedTransamericaThe four entity companies compensated investors for 9760 million U.S. dollars on the grounds that there were errors in their investment models and misleading investment services.
(Comprehensive report by the American Life Insurance Guide Network)
reference document:
01. "Aegon: Transamerica settles universal life litigation", 2018.10.04, Article, https://www.marketwatch.com/press-release/aegon-transamerica-settles-universal-life-litigation-2018-10-04
02."Transamerica Entities to Pay $97 Million to Investors Relating to Errors in Quantitative Investment Models", 2018.08.27 Article, https://www.sec.gov/news/press-release/2018-167
03. "Universal Insurance (UL) lawsuit involves many well-known insurance companies", 2018.09.24, Article, https://thelifetank.com/lawsuit-against-universal-life-by-american-life-insurance
