expected to be mailed out. Radius Health, Inc. Investigation Shareholders Potentially Harmed By Merger Terms, Aon PLC Data Breach Investigation Personal Identifiable Information Of Over 145,000 Individuals Exposed, Certain Walmart Brand Great Value Spices Found to Contain Heavy Metals. Insurance sales representatives at Pacific Life Insurance Company (PacLife) may be deceiving consumers by presenting marketing misrepresentations about their Pacific Discovery Xelerator indexed universal life (PDX IUL) policies. Or put it in CDs that mature simultaneously to pay the IUL premiums? The answer to all of these very simple questions was NO! document.getElementById( "ak_js_2" ).setAttribute( "value", ( new Date() ).getTime() ); document.getElementById( "ak_js_3" ).setAttribute( "value", ( new Date() ).getTime() ); document.getElementById( "ak_js_4" ).setAttribute( "value", ( new Date() ).getTime() ); Please note: Top Class Actions is not a settlement The company investigated the breach and determined that its systems had been breached several times between December 29, 2020 and Read More. By submitting your comment and contact information, you agree to receive marketing emails from Top Class Actions regarding this and/or similar lawsuits or settlements, and/or to be contacted by an attorney or law firm to discuss the details of your potential case at no charge to you if you qualify. Be cautious if agents try to paint a pretty picture with illustrations that arent guaranteed, or who suggest youll make out big by taking out a loan to pay for your IUL. Keep in mind that a wide range of consumer protections are in place for all life insurance customers, including a 10-day free look period after purchase, says Dolan. When a life insurance claim goes on for too long, without the family being paid, a lawsuit is the only way to make the life insurance company comply with the law and pay the policy. According to bankruptcy documents, Shurwest faces at least 140 claims totaling more than $197.5 million. Required fields are marked *. To read the complaint for the amended class action lawsuit, click here (the class was certified at the end of 2021). Pacific Life Insurance Company Misleads Consumers Into Purchasing PDX IUL Policies, Alleges Class Action, GE Capital Assurance universal life price hikes may be unlawful and excessive, Creditor and debt collector calls class action lawsuit investigation. The company's new policy on head count, made clear in its first-quarter earnings report, aligns with decisions made by Morgan Stanley and Bank of America. Veralytics Flagg advises you to check with a certified public accountant before buying, since they operate under a stricter set of rules than most insurance agents. A class action lawsuit filed in the California Superior Court alleges that Pacific Life Insurance Company has created a false marketing scheme to push and sell their PDX IUL policies by using the complicated nature of IUL policies against unknowing consumers. Under the terms of the settlement, Transamerica will pay into a common fund and absorb the attorneys fees. The class action goes as far as to allege that PacLife structured the PDX Policies in a way that incentivizes its sales agents to heap even more risk on the unwitting policyowners, offering their own sales agents commissions if they successfully push through a PDX IUL policy sale. Interested in articles like these? Top Class Actions is a legal news source Shurwest is also being sued by Minnesota Life. Are the payment streams from the federal employees direct deposited into a trust or dedicated account that will then be used to make payments to the investor? Indexed universal life policies are unique forms of life insurance which tie interest rates to a market index such as the S&P 500 or Nasdaq 100. . The plaintiffs later asked the court to terminate the lawsuit. A bunch of scary language & fear tactics, but not substance. Information provided on Forbes Advisor is for educational purposes only. California IUL Lawsuit Is One To Watch, Attorney Says By John Hilton The insurance industry will be watching closely in the coming months as a class-action lawsuit over an indexed. The plaintiffs say those concerns have been addressed in the new Arizona lawsuit. So, its no wonder that IULs are complicated. Opinions about indexed universal life insurance vary, but critics warn that its not the riskless investment it may be sold as, and you could lose it all. This is ClassAction.org's current list of open lawsuits and investigations. This website is not intended for viewing or usage by European Union citizens. When someone purchases a life insurance policy, the insurance company may provide him or her with an illustration of the policys benefits. We have affiliations in specific cases with attorneys licensed to practice in almost every state court in the U.S. We also are affiliated with Rochon Genova, a law firm in Canada, and serve as co-counsel in lawsuits filed in . Some of the insurance companies selling IULs include: This piece is written about the recent Indexed Universal Life Policy (IUL) Class False Marketing Lawsuit Investigation. This case has been out there for a few years and for whatever reason, the normal trade publications havent really written about it. The complaint alleges that, among other things, the company deceptively sold its Indexed Universal Life ("IUL") policies by failing to disclose the high costs associated with these policies. GE Capital Assurance universal life price hikes may be unlawful and excessive, Creditor and debt collector calls class action lawsuit investigation, Essential: Remember your cookie permission setting, Essential: Gather information you input into a contact forms, newsletter and other forms across all pages, Essential: Keep track of what you input in a shopping cart, Essential: Authenticate that you are logged into your user account, Essential: Remember language version you selected, Functionality: Remember social media settings, Functionality: Remember selected region and country, Analytics: Keep track of your visited pages and interaction taken, Analytics: Keep track about your location and region based on your IP number, Analytics: Keep track of the time spent on each page, Analytics: Increase the data quality of the statistics functions, Advertising: Tailor information and advertising to your interests based on e.g. It is unknown when the case will go before a judge. But not successfully, according to Birnbaum. To read the Order from the Federal Court certifying the Class Action, click here (its an interesting read). Chicago. Someone who is receiving annuity payments can choose to sell those payments to an investor for a lump sum. No. THOUGHTS AND CONSIDERATIONS BEFORE YOU BUY - Mtis Money Matters. Minnesota Life would be sued itself by several disgruntled clients. Remarks in the article do not apply to all PacLife reps. Are you kidding me? Insurance agents typically arent required to undergo the same training as stockbrokers to sell so-called derivative products such as options based on an underlying index like the S&P 500. The case has broad implications for the industry and the controversial Actuarial Guideline 49 put forth by the National Association of Insurance Commissioners, said Kevin Kimmerling, senior vice president and assistant general counsel for Global Atlantic Financial Group. Critics say insurers almost immediately got around the new rules by offering IUL bonuses and multipliers. The IUL Class Action Lawsuit is Hong Li v. Pacific Life Insurance Company, et al., Case No. I didnt understand that the illustration involved my borrowing from my policy and reinvesting large sums for several more years. With the structure payments, you are actually increasing the premium that goes into the IUL! The lawsuit seeks class-action status welcoming the possibility that the attorneys working for the plaintiffs can prove that PacLife's behavior in marketing a certain indexed universal life insurance policy violates the law and hurts many people across the United States. So, assuming clients with money pay premiums into an IUL, the question is what to do with that money as you wait to fund the IUL over a 5-, 7-, 10-year period. settlement administrator or your attorney for any updates regarding This article literally said NOTHING. ARE INDEXED UNIVERSAL LIFE INSURANCE (IUL) POLICIES GOOD? Agents selling this structure were talked into believing that it would be much better for clients to invest their money into structured payment streams (SPS). 3) I have a software company (OnPointe which had the best investment risk software in the industry (www.onpointeriskanalyzer.com)). Learn more about the cookies we use. John may be reached at [emailprotected] Follow him on Twitter @INNJohnH. content for publishing on our website. We do this by being proactive and holistic. That is the same year she became a Pacific Life producer. The attorneys we work with, however, tipped us off to reports within the industry that suggest some companies may be misleading their customers when putting together their financial return illustrations. The plaintiffs in the new lawsuit tell a similar story found in many other lawsuits. Something went wrong. What you will read in this newsletter is a classic example of me helping an IMO and ultimately hundreds of agents from getting caught up in the lawsuits that are now flying. According to the companys announcement, these new policies build on the structure of the first PDX policies with an added Enhanced Performance Factor Rider that allows policyholders more options for their policies. The structured payment company that was responsible for investing the money of clients and generating the payment streams needed to fund all the IUL policies is NO LONGER PAYING! The two companies appear to share the same address, phone number and employees, Minnesota Life noted in a lawsuit it filed against Shurwest in July 2021 in the U.S. District Court for the District of Minnesota. It requires that designs with multipliers or other enhancements should not illustrate better than non-multiplier designs. They are complex products sold with false promises and deceptive marketing, says Birny Birnbaum, executive director of the nonprofit Center for Economic Justice. This might include plain vanilla ones such as the S&P 500 and the Russell 500 indices. First let me say that a 6th grader doing a few minutes worth of research on the internet should have come to the conclusion that the person behind this structured payment company was someone who you would NOT want to do business with. Top Class Actionss website and social media posts use affiliate links. Eufy misled doorbell and camera users about how and where it stores recorded information. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for Orange County. Contact us today to see if you are entitled to join the Indexed Universal Life Policy (IUL) Class False Marketing lawsuit investigation. Also, the new AG 49A permits the IUL illustration crediting rate to be 50 basis points higher than the policy loan rate, down from 100 basis points. Unlike other products, such as term and whole life, universal life which is . All Rights Reserved. But the Center for Economic Justices Birnbaum says insurance agents often use optimistic projections, or illustrations,to show the gains these policies can earn over the years. Click here if you want to learn about Roccy DeFrancescos favorite IUL. The move boosts data processing speed and establishes a modern infrastructure to build out the firm's vision for an all-in-one technology suite. Bobby Samuelson, editor at The Life Product Review. In fact, during this time, the policys value allegedly declined from around $638,000 to $593,000. Lets face itthere are a lot of different programs in the marketplace you can use to illustrate the value of IUL (Indexed Universal Life) insurance. The initial cap of 10% was not sustainable based on portfolio yields and option pricing. Roccy DeFrancesco, JD Become a subscriber below! Let me explain how this IUL (Indexed Universal Life) sales structure worked. Insurers often use low-cost loans in order to sell IULs, and have lenders lined up to offer loans to potential IUL buyers, he says. The crux of the complaint is both technical as well as . A list of open investigations and Please review our Affiliate Link Disclosure for more information. Thats more than most hedge funds. Scammers pushing FIP allegedly used brokers and insurance producers to find investors -- often retired veterans, teachers and firefighters. Class actions on "vanishing premium" sales practices reaped "huge jury verdicts, multi-million dollar class action settlements and changes that go to the very foundation of the life insurance industry." We're talking literally billions of dollars in aggregate settlements. Thousands of Illinois drivers cited for using a cellphone while driving could find themselves part of a class action lawsuit. Entire contents copyright 2022 by InsuranceNewsNet.com Inc. All rights reserved. This means that it wont expirethe way term life insurance willprovided the premiums youre paying and policy account values are enough to keep the policy in force. PacLife misleadingly marketed their PDX life insurance policies in a way that concealed the policies risks while overstating their benefits, according to the plaintiff. Andy Kvesic is a managing partner at Radix Law and a part of the legal team representing Shurwest. I was told not to worry about understanding it, and that the illustrations shows that it works. Most policies have both an interest floor and an interest cap, meaning that maximum gains are limited even if a stock index performs extremely well. This website is not intended for viewing or usage by European Union citizens. for informational purposes only. According to Harvey Rosenfield, an attorney with Consumer Watchdog who represented the plaintiffs, Transamerica notified policyholders in 2015 that it was increasing charges by as much as 38% on universal life insurance packages originally sold in the late 1980s and early 1990s. The most damning allegations in the new 2019 lawsuit are the targeting of Asian immigrants, and claim that 95% of sales within Premier Financial Alliance are affiliate purchases. Why was it so clear to me that this structure was dangerous? Its truly amazing that Minnesota Life and one of the bigger IMOs in the industry fell for this plan. New cases and investigations, settlement deadlines, and news straight to your inbox. that reports on class action lawsuits, class action settlements, No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com. It is my belief after working with insurance agents for two decades that Im sure most didnt do any real research and just knew they could sell a lot of IULs and make extra money selling the structured payments as well. They allege those tickets were illegally and intentionally processed through the wrong court system, allowing the city to keep the fines for itself, totaling some $20 million. This is an IUL sales persons dream. If you are considered eligible to be among the class of consumers described in the class action lawsuit investigation, you may eventually be able to participate in receiving any compensation the court may award. Is the company managing the payments bonded in case they abscond (steal) the money? Its a way for life insurance policyholders to have their cash value take part in the market. The NAIC has been very active on the regulation of IULs, which continues to this day, says the ACLIsDolan. Top Class The issues in. In June 2014, a state court judge preliminarily approved a settlement to a class-action lawsuit against Fidelity & Life Guaranty Life Insurance, Co. How To Find The Cheapest Travel Insurance, Tips for Buying Life Insurance for the First Time, What To Expect In Life Insurance Medical Exam, How To Choose A Life Insurance Beneficiary. Agents could adjust their compensation to be significantly higher than the market-rate, which resulted in higher policy charges for clients and greater risk of downside loss. Although IUL policies have the potential for high rates of growth, the policies also have the risk of no growth if a stock market index performs fully. An indexed life insurance policy is like other life insurance policies in that it will provide a death benefit to a beneficiary in exchange for premiums paid every month. Stocks dip after inflation data, Fed economists' warning, Security Benefit enhances its Foundations Annuity, RetireOne partners with Pension & Wealth Management Advisors to help clients protect retirement income, Texas lawsuit: Lincoln Financial annuity fell far short of illustration promises. We will be sure to monitor the situation and update you as we find out more. After these representations, Li reportedly opted into a IUL policy through PacLife. Even if a market index performs extremely well, not all of these gains will be translated into a policys interest rate. This means that the cash value account linked to the policy allows the insured to borrow without tax consequences. About Us The primary issues are as follows: There is no telling that this complaint will be successful, but it may have a dramatic affect (win or lose) on our industry. Similarly, please check out ourcurrent list of Class Actions and Class Action Investigations, here. Attorneys Privacy Policy | How can that be? In August, four Transamerica entities were ordered by the Securities and Exchange Commission to pay $97.6 million for misconduct related to faulty investment models., Related Topics: But for thousands of advisors, what I do is keep them out of trouble by reviewing products and sales concepts. Mr. Rosenfield also alleges Transamerica wanted policyholders to relinquish their life insurance so the firm could recoup losses it sustained as a result of low interest rates. Minnesota Life is too big to bring down over this, but the damages from these lawsuits will be significant if liability is proved. Axa Equitable Life Insurance and Lincoln National Corp. are also facing litigation for raising the costs of their universal life policies. We want to help people make smart financial decisions How? PacLife misleadingly marketed their PDX life insurance policies in a way that concealed the policies risks while overstating their benefits, according to the plaintiff. For an IUL policy, the interest rate on the policys cash value is tied to a stock market index such as the S&P 500 or Nasdaq 100. Remember that a life insurance policy may be in effect for 40 years or more and a lot can happen during that time. Theres good and bad about many things are on the internet, as well as people misrepresenting things. Consumers consider owning life insurance a vital part of financial wellness including aging Americans who want to ensure that their loved ones are provided for after they pass away. Usage by European Union citizens insurance policy, the normal trade publications havent really written it. 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Many other lawsuits tax consequences will go before a judge Money Matters remarks in the lawsuit! Have their cash value account linked to the policy allows the insured to without...