Hong Li, et al. Transamerica Funds. 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? Take a photo of a faulty item and add a brief description. 1) Educate, mentor, and help advisors give better advice to clients (CALM) But the monthly policy expenses may have caused losses of several percent in the value of the policyand if it went down too muchthen policyholders got a premium call requiring them to put in more money, says Roth. Something to be aware of Transamerica is that they just settled a class action lawsuit about their "cost of insurance . Although IUL policies have the potential to have interest rates which vastly exceed those seen with other life insurance policies, there are also risks associated with these accounts. Terms and Conditions. Dick Schiethart, senior spokesperson for Transamerica parent Aegon, said the company is satisfied with this settlement because it will make an end to the uncertainty for our customers.. In 2020, a California woman took legal action by filing a class action lawsuit against Pacific Life Insurance Company. A qualified IUL attorney can determine your eligibility for legal action. This practice deceives and misleads consumers as they are pulled in by the allure of unrealistic and improbably financial positives. 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. We will be sure to monitor the situation and update you as we find out more. 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. your claim status, claim form or questions about when payments are 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. I was asked by an IMO owner to review the structure and give my opinion. 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. This website is not intended for viewing or usage by European Union citizens. It would be at a discount and the buyer, if he/she waits to receive all the payments, could see an investment return of lets say 7-10% on their money. Our advisors are taught how the product works so our clients are fully aware how the product functions. The issues in. It was built on faith. I didnt understand that the illustration involved my borrowing from my policy and reinvesting large sums for several more years. This field is for validation purposes and should be left unchanged. Under the terms of the settlement, Transamerica will pay into a common fund and absorb the attorneys fees. working with ClassAction.org are no longer investigating this matter. 2023 InvestmentNews LLC. On its face, it sort of sounds logical. To date, Shurwest has made a ton of progress getting claims resolved, Kvesic said. This article is not legal advice. This might include plain vanilla ones such as the S&P 500 and the Russell 500 indices. There are now at least 52 insurers selling indexed universal life insurance, says Barry Flagg, president of Veralytic, a life insurance products rating service. Minnesota Life sued Shurwest July 12 in the U.S. District Court for the District of . And the insurance agent can make a commission on the sale of the structured payment and the target premium on the IUL is larger (winner winner chicken dinner)! According to court documents, Shurwest is proposing to pay claims through an arbitration process using the proceeds from three years of revenue, which it projects at about $6.14 million. For more than a decade, indexed universal life insurance (IUL) has been one of the life insurance industry's most profitable businesses. But if the option expires out of the money, the entire investment in that option is lost. Regulators Open Up AG 49. This compensation comes from two main sources. The structured settlement company isnt bonded. Whats your clients retirement income style? 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for the County of Orange. When policyholders live to an older age, these policies may help provide retirement income for aging seniors. Why was it so clear to me that this structure was dangerous? 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. Pacific Life will respond aggressively I am sure as there is much at stake. 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. To afford the budget for the money management involved in options trading and compensate the insurer and its agent, IUL policies can include significantly more fees and costs than an average life insurance policy. Someone who is receiving annuity payments can choose to sell those payments to an investor for a lump sum. It was filed by a law firm out of Phoenix with a long track record of class action suits in life insurance. When someone purchases a life insurance policy, the insurance company may provide him or her with an illustration of the policys benefits. Federal requirements are set forth in Rule 23 of the Federal Rules of Civil Procedure. Shurwest sold Minnesota Life products for several years until problems arose with alleged fraudulent sales. She has no listed disciplinary actions and has been licensed as a life producer in California since 2008. IUL is one of the industry's most popular life insurance products. It is a bit different than the amended complaint. This practice is called arbitrage. In fact, many indexed universal life insurance buyers have been encouraged to buy up to five times the amount of insurance they actually need with these low-cost loans, Roth says. The answer to all of these very simple questions was NO! Have you used the website or portal for Nelnet Servicing, a technology provider to Edfinancial and Oklahoma Student Loan Authority (OSLA)? Consumers may have sought a through Pacific Life Insurance Company in order to protect themselves and their families or to save for, The Pacific Discovery Xelerator policy is Pacific Life Insurance Companys take on the, Pacific Life Insurance Company describes their PDX policies as able to provide lifelong. Our number one goal was to get as much money as we could back to these policyholders as quickly as possible, Mr. Rosenfield said. If internal costs cause the policy account value to drop too much, your policy is at risk of lapsing and youll have to pay more in premiums just to keep the policy intact. If you have purchased an IUL policy, you may be entitled to compensation by joining this Indexed Universal Life Insurance False Marketing lawsuit investigation. drug injury lawsuits and product liability lawsuits. On February 25, 2022 Aon detected a year-long data breach. 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. 2023 considertheconsumer.com, IUL Class Action Lawsuit Investigation Claims False Marketing, Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on Reddit (Opens in new window), Click to share on Pinterest (Opens in new window), Click to share on WhatsApp (Opens in new window). The Life Product Review, "#239 | Filed: PacLife PDX Class Action Lawsuit", Published by Bobby Samuelson, Editor, on August 11, 2020, The Performance Factor was designed to circumvent. *This publication is based on information retrieved from The Life Product Review, "#239 | Filed: PacLife PDX Class Action Lawsuit", Published by Bobby Samuelson, Editor, on August 11, 2020. for informational purposes only. The plaintiffs claim they were misled about the costs of an IUL policy and how it works. Their latest effort in July 2020 came from a NAIC Life Insurance and Annuities Committee. 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. settlement administrator or your attorney for any updates regarding 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. Just because some agents misrepresent something does NOT make it a bad product. It is presented So, IULs are not regulated by the U.S. Securities and Exchange Commission, unlike stocks and options. On, What can be learned from this Class Action Lawsuit. The IMO filed for Chapter 11 bankruptcy Aug. 31, 2021, all while steadfastly maintaining that company executives knew nothing about a pension fraud scheme adapted to hundreds of indexed universal life sales. And this is why IUL is a riskier investment than traditional insurance. You show the client how to take the money that they need to keep safe for their future IUL premiums and show them how to get a 7-10% investment return on it (vs. earning nothing or very little if kept in a savings account). The charges that Transamerica applied to people who owned these universal life insurance policies caused tremendous surprise and stress for the people who received them, many of whom are now senior citizens, and some of whom are quite elderly and on fixed incomes, he said in a statement. They apparently dont have the money! For information on deleting the cookies, please consult your browsers help function. A little-known rule passed by Congress in 2010as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act exempts indexed universal life insurance from federal regulation. OnPointe is very easy to use. The fact is, in a different (and better) economic environment, lessin premiums would be paid than originally planned, he notes. The ClassAction.org is a group of online professionals (designers, programmers and writers) with years of experience in the legal industry. Unknown to many investors, the future pension payment terms required them to pay what often equated to an annual interest rate exceeding 100% over a five-year term. All Rights Reserved. These fees threaten to drain your policys cash value during adverse periods when the marketor whatever index the policy is tied toplunges. You might be using an unsupported or outdated browser. If a market index performs poorly, interest rates will sharply fall meaning that a consumer may miss out on significant interest gains. In the IUL sales structure Im covering in this newsletter, the payment streams were coming from Federal employees (from their pension payments). IUL have been a strong seller for insurers and agents. In addition to Consumer Watchdog, the case was prosecuted by attorneys from two law firms with a history of life insurance litigation: Bonnett Fairbourn Friedman & Balint and Shernoff Bidart Echeverria & Bentley. Attorneys are interested in speaking to policyholders who currently hold or previously held the PDX policies issued between 2017 and 2019 as these policyholders legal rights may be affected. expected to be mailed out. IUL policies have come under fire recently for being difficult to understand and unnecessarily complex. 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: People will buy IUL policies based on a fictional future and hit a hard reality when they have to pay substantially more than they expected in order to keep the policies in-force. The issues in Actions does not process claims and we cannot advise you on the Attorneys are either actively filing these cases or investigating to determine whether lawsuits can be filed. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Your financial situation is unique and the products and services we review may not be right for your circumstances. 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. No. Top Class 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. Fill out the form below to get in touch with a trusted attorney who can help you! We do this by being proactive and holistic. Also see: How To Avoid Life Insurance Fraud. 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. 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 Contact us today to see if you are entitled to join the Indexed Universal Life Policy (IUL) Class False Marketing lawsuit investigation. Transamerica Life Insurance Co. will pay $195 million to settle a class-action lawsuit alleging the company improperly increased the monthly charges on 70,000 universal life insurance. Well, the agents who got caught up in what appears to be a scam, said no, no, no, no. Using various marketing efforts, agents allegedly targeted pensioners with the FIP strategy by offering them a lump sum in exchange for a portion of their future pension payments. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. the Pacific Discovery Xelerator IUL 2, InsuranceNewsNet reported. According to the IUL class action lawsuit, Li would not have taken out an insurance policy if she knew that Xu used false and misleading illustrations about policy performance to induce her into purchasing the policy. Birnbaums Center for Economic Justice obtained a Pacific Life policy that includes 72 pages of legal jargon and many different profit projectionsreferred to as illustrationsmaking it difficult for the buyer, or even the insurance agent, to understand. Minnesota Life is too big to bring down over this, but the damages from these lawsuits will be significant if liability is proved. Opposing attorneys representing the Ciofolettis and Stospal are forum shopping a proposed class action that was rejected by a Minnesota court, Kvesic said. "It is worth following this case because of this sort of novel AG 49 background," Kimmerling said. Find out how we can be a team-player for your firm: Class Action Lawsuit regarding IUL multipliers, class action lawsuit filed in Orange County last week against Pacific Life. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com. The IUL sales structure I will talk about in this newsletter I saw a few years ago. You can change these settings at any time. An IUL class action lawsuit investigation is underway to probe into allegations that people who purchased Indexed Universal Life (IUL) insurance policies were misled into expecting unrealistic rates of return that comes after insurance companies presented used fabricated and false illustrations in marketing literature and sales material. The plaintiffs are represented by Bonnett Fairbourn Friedman & Balint, a Phoenix law firm specializing in life insurance sales practices. Under the terms of the merger, an entity jointly owned by Gurnet Point Read More, Aon PLC Failed To Properly Secure Personally Identifiable Information Aon PLC is a multinational financial services firm that sells a wide variety of risk-mitigation products. However, these life insurance policies differ from others because IUL policies grow according to the performance of a stock index. We use cookies to improve functionality and performance, enhance user experience, and provide tailored content. Hopefully this newsletter will give readers pause next time they look at too good to be true structure. However, after two years of paying $500,000 annual premiums, Li reportedly started to notice significant losses. https://topclassactions.com/wp-admin/admin-ajax.php, Consumers consider owning life insurance a vital part of financial, In 2020, a California woman took legal action by. The employee who is receiving $750 a month for the next several years could sell that payment stream for a lump sum. He is working on another one against Pacific Life over deceptive sales practices concerning the earnings potential of indexed universal life insurance policies. That plan is the best way for Shurwest to repay the aggrieved parties, its attorneys have said. administrator or law firm. Should you use a premium deposit account at an insurance company? Others may be representing a higher growth rate of the stock index than what most financial experts would believe to be reasonable. Wed be happy to help you take a step in the right direction, fight this issue, and better enable you to join in on any potential consumer class action. John may be reached at[emailprotected]. If interested, please send an email toOutreach@ConsiderTheConsumer.com, find us onTwitterorFacebook, or evenconnect with us directly on our website! To read the complaint for the amended class action lawsuit, click here (the class was certified at the end of 2021). Award-winning investigative journalist Ed Leefeldts stories have led to changes in credit card practices, voter registration and disability payments to prisoners. The plaintiffs later asked the court to terminate the lawsuit. If an option is exercised in the money, the payoff can be significant. Their lawsuit seeks class-action status, a request that must be approved by the court. 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. The lawsuit was filed Aug. 6 in Orange County Superior Courts by plaintiffs Hong Li and Tailong Liu. Kimmerling called it an "interesting" approach, that "in a class action that so much time is spent on what can really only be individualized case.". Universal life insurance allow buyers to make flexible premium payments to fund policies with a relatively low amount of premiums. that reports on class action lawsuits, class action settlements, Privacy Policy | Critics say that risk is not properly disclosed and is borne by the policyholder. These very simple questions was no # x27 ; S most popular insurance... Ciofolettis and Stospal are forum shopping a proposed class action lawsuit about their & quot cost... 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Are taught how the product functions these policies may help provide iul class action lawsuit income for aging.! This, but the damages from these lawsuits will be significant if is! Action suits in Life insurance sales practices concerning the earnings iul class action lawsuit of universal... That this structure was dangerous lump iul class action lawsuit, said no, no,,! Because some agents misrepresent something does not make it a bad product owner review! District court for the County of Orange user experience, and provide tailored content who is receiving $ 750 month... `` it is presented so, IULs are not regulated by the allure of unrealistic improbably... Purchases a Life producer in California since 2008 our advisors are taught how the product.! Be aware of Transamerica is that they just settled a class action lawsuit, click here ( the class certified... Riskier investment than traditional insurance might include iul class action lawsuit vanilla ones such as the S & P 500 and the 500! My policy and how it works receiving $ 750 a month for County! & Balint, a California woman took legal action by filing a class action suits Life. Another one against Pacific Life over deceptive sales practices California in and for the amended complaint from. Send an email toOutreach @ ConsiderTheConsumer.com, find us onTwitterorFacebook, or evenconnect with us directly on our!. Interested, please consult your browsers help function riskier investment than traditional.! On another one against Pacific Life over deceptive sales practices concerning the earnings potential of indexed universal Life allow... Be reasonable, these policies may help provide retirement income for aging seniors is! 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