Posted by (American Life InsuranceGuide Net News)Transamerica(Pan American Life, Also translated as "American Life") The life insurance company is about to pay US$1.95 million to settle a class-action lawsuit. The accusation 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 lawyer 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世紀80年代末(1980s)和90年代初(1990s)購買萬能壽險保單的客戶，他們的保費將增加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 those 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 policyholder
Transamerica(Pan American Life, Also translated as "American Life") In a statement, it was stated in the policy that the company was allowed to adjust the monthly fees within a maximum range.And claimed that the increase "is 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 thatTransamericaIt is hoped that policyholders will abandon the policy so that the company can make up for the losses suffered due to low market interest rates.
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 participated in the group litigation will receive monetary rewards-they can choose to pay to the cash value of the policy, or take cash directly (in case of policy lapse)-and Transamerica cannot increase it within five years Any additional monthly deductions.
Transamerica(Pan American Life, Also translated as "American Life") Dick, 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 InsuranceIn the report of the Guide Online Week ("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 their investment models were wrong, and investment services had misguided misconduct.
(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
