In No. 212 (posted April 7, 2017), I discussed four class action lawsuits filed recently in the federal court in Philadelphia against Lincoln National Life Insurance Company (Fort Wayne, IN) relating to cost-of-insurance (COI) increases imposed on owners of certain universal life insurance policies. On March 20, 2017, U.S. District Judge Gerald J. Pappert, to whom the cases had been assigned, issued an order granting motions to consolidate the cases. He ordered the plaintiffs to file a consolidated class action complaint within 30 days of the order. On April 19, on schedule, the plaintiffs filed a consolidated class action complaint. (See In Re: Lincoln National COI Litigation, U.S. District Court, Eastern District of Pennsylvania, Case No. 2:16-cv-6605.)
The Consolidated Complaint
The plaintiffs in the consolidated complaint are owners of universal life insurance policies originally issued by Jefferson-Pilot Life Insurance Company (Greensboro, NC), which merged into Lincoln in 2006. The defendants are Lincoln and its Philadelphia-based parent company.
The plaintiffs allege that the "COI increases generally appear to have ranged from roughly 50% to 95%—far beyond what the enumerated policy factors permit." The plaintiffs also allege that the defendants breached the policy contracts in at least four ways. First, the increases "were based on non-enumerated prohibited factors." Second, the increases "were designed to recoup past losses rather than respond to future expectations." Third, the increases "were non-uniform across insureds of the same rating class." Fourth, "Lincoln refused to provide an illustration of a policy upon request, which it was required to do."
The Classes
The consolidated complaint describes two classes. One is the "2016 COI Increase Class," which has some state sub-classes; it consists of policyholders who received, in or after 2016, a notice of the COI increase. The other is the "Illustration Grace Class," which consists of policyholders whose policies state that the company will provide an in-force illustration on request; some were told that "While a policy is in a grace period, we are unable to provide an in-force illustration."
The Claims for Relief
The consolidated complaint contains 11 claims for relief. Here is a paraphrase of them:
General Observations
I think the consolidated complaint is stronger than the complaints filed in the four individual cases. I have nothing to add to the general observations I made in No. 212. The parties have not yet submitted to Judge Pappert a joint proposed timetable for the management of the consolidated case, but they probably will file such a proposal in the near future. I plan to report further as the case progresses.
Available Material
In No. 212, I offered a complimentary PDF (still available) containing some exhibits and other documents relating to the four individual cases, but I did not offer any of the complaints. Now I am offering a complimentary 45-page PDF containing the consolidated class action complaint. Email jmbelth@gmail.com and ask for the April 19, 2017 consolidated complaint in the Lincoln COI increase case.
The Consolidated Complaint
The plaintiffs in the consolidated complaint are owners of universal life insurance policies originally issued by Jefferson-Pilot Life Insurance Company (Greensboro, NC), which merged into Lincoln in 2006. The defendants are Lincoln and its Philadelphia-based parent company.
The plaintiffs allege that the "COI increases generally appear to have ranged from roughly 50% to 95%—far beyond what the enumerated policy factors permit." The plaintiffs also allege that the defendants breached the policy contracts in at least four ways. First, the increases "were based on non-enumerated prohibited factors." Second, the increases "were designed to recoup past losses rather than respond to future expectations." Third, the increases "were non-uniform across insureds of the same rating class." Fourth, "Lincoln refused to provide an illustration of a policy upon request, which it was required to do."
The Classes
The consolidated complaint describes two classes. One is the "2016 COI Increase Class," which has some state sub-classes; it consists of policyholders who received, in or after 2016, a notice of the COI increase. The other is the "Illustration Grace Class," which consists of policyholders whose policies state that the company will provide an in-force illustration on request; some were told that "While a policy is in a grace period, we are unable to provide an in-force illustration."
The Claims for Relief
The consolidated complaint contains 11 claims for relief. Here is a paraphrase of them:
- Breach of contract. This claim is on behalf of the plaintiffs and the 2016 COI increase class.
- Breach of the implied covenant of good faith and fair dealing. This claim is on behalf of the plaintiffs and the 2016 COI increase class.
- Injunctive relief prohibiting Lincoln from denying illustrations to policyholders during policy grace periods. This claim is on behalf of the plaintiffs and the illustration grace class.
- Injunctive relief prohibiting Lincoln from collecting the unlawful and unfair COI increase amounts, and requiring the payment of restitution. This claim is on behalf of the plaintiffs and the 2016 COI increase class.
- Declaratory relief stating that the COI increases are unlawful and in material breach of the policy contracts. This claim is on behalf of the plaintiffs and the 2016 COI increase class.
- Violations of the North Carolina Deceptive and Unfair Practices Act. This claim is on behalf of the plaintiffs and the 2016 COI increase class.
- Violations of the Texas Administrative Code and the Texas Insurance Code. This claim is on behalf of one of the plaintiffs and the Texas sub-class.
- Violations of the New Jersey Consumer Fraud Act. This claim is on behalf of one of the plaintiffs and the New Jersey sub-class.
- Violations of the New York General Business Law. This claim is on behalf of one of the plaintiffs and the New York sub-class.
- Violations of the California Unfair Competition Law. This claim is on behalf of one of the plaintiffs and the California sub-class.
- Violations of the California Elder Abuse Law. This claim is on behalf of one of the plaintiffs and the California sub-class.
General Observations
I think the consolidated complaint is stronger than the complaints filed in the four individual cases. I have nothing to add to the general observations I made in No. 212. The parties have not yet submitted to Judge Pappert a joint proposed timetable for the management of the consolidated case, but they probably will file such a proposal in the near future. I plan to report further as the case progresses.
Available Material
In No. 212, I offered a complimentary PDF (still available) containing some exhibits and other documents relating to the four individual cases, but I did not offer any of the complaints. Now I am offering a complimentary 45-page PDF containing the consolidated class action complaint. Email jmbelth@gmail.com and ask for the April 19, 2017 consolidated complaint in the Lincoln COI increase case.
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Email: jmbelth@gmail.com
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