30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for Orange County. Chicago. 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.". If your insurance company misrepresented the performance potential of your indexed universal life policy, you may be able to file an IUL lawsuit. "It's interesting because of the complaints against the agent itself and is certainly one that we're watching and we'll continue to watch.". Privacy Policy | 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. It was filed by a law firm out of Phoenix with a long track record of class action suits in life insurance. (the class was certified at the end of 2021). In addition, most software is clunky and hard to use. If an insurance company uses false marketing to overstate the benefits of IUL policies, consumers could make serious financial decisions without knowing the true risks of these policies. Pacific Life will respond aggressively I am sure as there is much at stake. Opposing attorneys representing the Ciofolettis and Stospal are forum shopping a proposed class action that was rejected by a Minnesota court, Kvesic said. your claim status, claim form or questions about when payments are The issues in. Please review our Affiliate Link Disclosure for more information. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com. If you make a purchase using 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. Top Class Actionss website and social media posts use affiliate links. About Us , Can I join this law suit against Pacific Life. In August, a California woman Hong Li filed a class action lawsuit against Pacific Life Insurance and Sky Vision Insurance Agency for allegedly deceiving her and other consumers about the performance of their IUL policies. It is unknown when the case will go before a judge. Top Class All Rights Reserved. They apparently dont have the money! 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for the County of Orange. In one examplecited by Veralytic,a person could pay $367,000 over six years on an IUL policy and get nothing back if the policy is canceled. 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. If you purchased a PacLife PDX Policy and are not satisfied with how your policy has performed, you may be entitled to compensation for yourself and for other policy owners by joining this Pacific Life Insurance class action lawsuit. Nelnet Servicing Data Leak Your Personal Information At Risk! Top Class These fees threaten to drain your policys cash value during adverse periods when the marketor whatever index the policy is tied toplunges. OnPointe is very easy to use. A qualified IUL attorney can determine your eligibility for legal action. View Guidelines. What part of this structure looks like it is one that will protect our clients investments? But indexed universal life would not be increasing in popularity if millions of long-term planners and families were not finding the cost of owning the product to be a good value, says ACLI spokesperson Jack Dolan. Get breaking news, exclusive stories, and money- making insights straight into your inbox. With the structure payments, you are actually increasing the premium that goes into the IUL! Thats more than most hedge funds. 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. Are you sure you want to rest your choices? This website is not intended for viewing or usage by European Union citizens. This is an IUL sales persons dream. That plan is the best way for Shurwest to repay the aggrieved parties, its attorneys have said. 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. 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). You must contact the 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. Whats the problem with this awesome sales concept? 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. Transamerica Funds. Weve asked them to identify a class and theyve been unable to do it, Kvesic told InsuranceNewsNet. Critics say that risk is not properly disclosed and is borne by the policyholder. Owners of this product must be aware of exactly how it works, because, unlike certain other types of life insurance, IULs have a fluctuating component to them.. It is a bit different than the amended complaint. https://topclassactions.com/wp-admin/admin-ajax.php. John may be reached at [emailprotected] Follow him on Twitter @INNJohnH. lawsuits can be viewedhere. 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. I have been very concerned about the excessively high fees involved and am having trouble seeing how this can possibly work as illustrated to me by my producer. Roccy DeFrancesco, JD These cases were consolidated and put together in the class action lawsuit. He discussed the case last week at the American Council of Life Insurers' 2020 Annual Conference, conducted virtually. Depending on the policys terms, and pros and cons, a policyholder can tie up to 100% of their policys value to the stock index. This means that the cash value account linked to the policy allows the insured to borrow without tax consequences. Minnesota Life would be sued itself by several disgruntled clients. Were optimistic that the court is going to grant Shurwests motion to dismiss the complaint.. No. A committee of the National Association of Insurance Commissioners (NAIC), which sets the standards for the state regulators who control insurance, has struggled for years to produce guidelines that states can adopt to ensure that the illustrations used by insurance agents to sell IULs reflect the risk buyers take. for informational purposes only. Click here to download an example output of an IUL vs. funding a 401(k) plan example for a 50 year old. 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. John Hancock Life Insurance Co. settled a lawsuit related to UL insurance costs in July for $91.25 million. We have to rely on the employees to received their paychecks and then turn around and give it to the trust company. For more than a decade, indexed universal life insurance (IUL) has been one of the life insurance industrys most profitable businesses. Let me remind you PacLife is a A+ rated company with AM Best. Minnesota Life is too big to bring down over this, but the damages from these lawsuits will be significant if liability is proved. Award-winning investigative journalist Ed Leefeldts stories have led to changes in credit card practices, voter registration and disability payments to prisoners. With the structure payments, you are actually increasing the premium that goes into the IUL! Consumers may have sought a through Pacific Life Insurance Company in order to protect themselves and their families or to save for retirement. And this is why IUL is a riskier investment than traditional insurance. 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. Information provided on Forbes Advisor is for educational purposes only. 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 IUL sales structure I will talk about in this newsletter I saw a few years ago. So, IULs are not regulated by the U.S. Securities and Exchange Commission, unlike stocks and options. If consumers were deceived into taking out a PDX life insurance policy from PacLife through the use of deceptive marketing materials, their legal rights may have been violated. It was filed by a law firm out of Phoenix with a long track record of class action suits in life insurance. The crux of the complaint is both technical as well as . drug injury lawsuits and product liability lawsuits. The new lawsuit could significantly damage what remains of the Shurwest business, said Anil Vazirani, president and CEO of Secured Financial Solutions, a fiduciary advisory firm. 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. Insurance companies use sales illustrations and marketing materials showing some account values gaining favorable growth in future years to sell the IULs. This compensation comes from two main sources. 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: The employee who is receiving $750 a month for the next several years could sell that payment stream for a lump sum. The PacLife IUL Class Action Lawsuit is Hong Li, et al. Should you use a premium deposit account at an insurance company? 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 will be posted quickly, exposing the company and letting others see what happened to you! Their only requirement is to be licensed by the state as an insurance agent. Is it better to let the money sit safely in a savings account? Consumers may be able to file an IUL lawsuit if their insurance provider misrepresented the policys performance with false marketing promises. The California Department of Insurance lists a Tiffany Xu employed at the same San Marino address as Sky Vision Insurance Agency. A fresh lawsuit filed in Arizona bankruptcy court by Eleanor and Rocco Ciofoletti, of South Carolina, and Larry Stospal, of Texas, names both Shurwest and Minnesota Life as defendants. If you dont have the stomach for investment losses, or dont have the patience for long-term investing, IULs probably arent for you. Universal life insurance allow buyers to make flexible premium payments to fund policies with a relatively low amount of premiums. ", Although a class-action filing, the Li/Lui lawsuit names the agent along with the insurer. . Published April 17, 2023 9:54AM. A reputable trust company isnt being used. Are you kidding me? Hong Li, et al. 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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. We do this by being proactive and holistic. 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)! And a policy started in 2017 2019 somehow underperformed by 2020 (when the lawsuit was filed) Pretty short time frame to say something hasnt worked & need to file suit. Learn more about reprints and licensing for this article. 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. Its not a good idea to get involved in pyramid schemes! IUL policies have come under fire recently for being difficult to understand and unnecessarily complex. When someone purchases a life insurance policy, the insurance company may provide him or her with an illustration of the policys benefits. If you believe that what is alleged in the Indexed Universal Life Policy (IUL) Class False Marketing Class Action Lawsuit Investigation has affected you, please dont hesitate to reach out to us. Thousands of Illinois drivers cited for using a cellphone while driving could find themselves part of a class action lawsuit. Id love to get out of this while recovering as much as possible including the ridiculous surrender charge. drug injury lawsuits and product liability lawsuits. But not successfully, according to Birnbaum. Obamacare Premiums Drop For 3rd Consecutive Year, M&A Should Resume In 2021 As Insurers Reinvent: Deloitte, Find out how you can submit 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? And until you dig deep, IUL appears to have it all. Interest rates are determined by the underwriter of the universal life policy but with a contractual minimum which is usually around 2%. InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. The IUL Class Action Lawsuit is Hong Li v. Pacific Life Insurance Company, et al., Case No. On its face, it sort of sounds logical. They are complex products sold with false promises and deceptive marketing, says Birny Birnbaum, executive director of the nonprofit Center for Economic Justice. State court rules can differ. Fill out the form below to get in touch with a trusted attorney who can help you! When policyholders live to an older age, these policies may help provide retirement income for aging seniors. Its not good business to take advantage of people who are vulnerable! Options allow the holder to buy or sell the underlying index at a certain price at a certain time, which can rise or fall rapidly. 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. He said the class action status enables 90,000 motorists to possibly get their money back; a total of $20 million. 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. Your email address will not be published. Although the new lawsuit claims millions of dollars lost by the class, the three defendants lost premiums totaling less than $50,000, Kvesic said. However, this can result in some functions no longer being available. current list of Class Actions and Class Action Investigations, here. Its not good business to work with an insurance company you cant trust! 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. However, the plaintiffs argued Transamerica had breached its contract and acted in bad faith by raising charges as a pretext to avoid or offset its obligation to pay the guaranteed monthly interest. When the interest rates are bound by the movement of the stock or bond market, this becomes an Indexed Universal Life, or IUL insurance policy. If a lawsuit can be filed, indexed universal life insurance policyholders may be able to recover compensation for any harm they suffered in buying these policies. We use cookies to improve functionality and performance, enhance user experience, and provide tailored content. roccy@strategicmp.net, Why Every Advisor Should Have a 65 License. Subscribe for original insights, commentary and analysis of the issues facing the financial advice community, from the InvestmentNews team. 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). But critics say indexed universal life insurance is being sold dishonestly. The issues in document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Top Class Actions is a Proud Member of the American Bar Association, Various Trademarks held by their respective owners. Genworth Life and Annuity Company agreed to pay the settlement. Nonetheless, Vazirani insisted that his concern is to rid the industry of abusive marketing techniques being used to fund IUL sales. To date, Shurwest has made a ton of progress getting claims resolved, Kvesic said. 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. Their lawsuit seeks class-action status, a request that must be approved by the court. Vazirani and Ron Shurts, a founder of Shurwest, are bitter rivals who have clashed in the past. Contact us today to see if you are entitled to join the Indexed Universal Life Policy (IUL) Class False Marketing lawsuit investigation. Just because some agents misrepresent something does NOT make it a bad product. The easiest example of an SPS is when someone receives a guaranteed payout from an annuity for X amount of years. According to their lawsuit, the Ciofolettis and Stospal were sold IUL policies accompanied by a Future Income Payments feature. information here is for reference only. "The plaintiffs claim that the insurer created a product with a feature in it that is called a 'performance factor' that is designed to be within the letter, perhaps, of AG 49 while also aggressively illustrating a profit," Kimmerling explained. v. Pacific Life Insurance Company, et al., Case No. Mix in massively complex products designed to juice illustrations with opaque and unaccountable features and you have the recipe for future financial disaster, said Birnbaum in a July 2020 statement that warned consumers against buying IUL. 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. 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