LAWSUITS NEWS & LEGAL INFORMATION
Phoenix Life Insurance Reaches $42.5M Bad Faith Insurance Class Action Settlement
This is a settlement for the Bad Faith Insurance lawsuit.
Los Angeles, CA: A $42.5 million settlement has been agreed by Phoenix Life Insurance Co. ending a bad faith insurance class action lawsuit alleging the insurer unfairly raised rates on premium-adjustable universal life insurance policies. Additionally, the company has also agreed to freeze its rates for five years.
The settlement also prevents Phoenix from challenging the validity of any class member' PAUL policy as an unlawful "life wager,"which the insurer has frequently done in order to avoid paying death benefits, according to the lawsuit.
The class action lawsuit was filed following an announcement by Phoenix Life that it was raising COI rates on PAUL policies in 2010 and again in 2011. The lawsuit alleged the insurer was treating life settlement investors unfairly. Unlike whole life insurance policies that require fixed monthly premium payments, PAUL policies only require premiums to cover COI charges and other expenses, allowing policyholders to minimize their investments, according to the plaintiffs.
The PAUL policyholders claimed Phoenix discriminated against life settlement investors who pay their premiums on time by hiking the COI rates and did so because the company comes out ahead when policies lapse, and it' able to avoid paying death benefits.
The more than 1,000 class members will be sent checks in the mail, unless they opt out of the settlement. A $25,000 incentive award has been granted for named plaintiff Martin Fleisher.
The case is Fleisher v. Phoenix Life Insurance Co., case number 1:11-cv-08405, in the U.S. District Court for the Southern District of New York.
Published on Jun-1-15
The settlement also prevents Phoenix from challenging the validity of any class member' PAUL policy as an unlawful "life wager,"which the insurer has frequently done in order to avoid paying death benefits, according to the lawsuit.
The class action lawsuit was filed following an announcement by Phoenix Life that it was raising COI rates on PAUL policies in 2010 and again in 2011. The lawsuit alleged the insurer was treating life settlement investors unfairly. Unlike whole life insurance policies that require fixed monthly premium payments, PAUL policies only require premiums to cover COI charges and other expenses, allowing policyholders to minimize their investments, according to the plaintiffs.
The PAUL policyholders claimed Phoenix discriminated against life settlement investors who pay their premiums on time by hiking the COI rates and did so because the company comes out ahead when policies lapse, and it' able to avoid paying death benefits.
The more than 1,000 class members will be sent checks in the mail, unless they opt out of the settlement. A $25,000 incentive award has been granted for named plaintiff Martin Fleisher.
The case is Fleisher v. Phoenix Life Insurance Co., case number 1:11-cv-08405, in the U.S. District Court for the Southern District of New York.
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