John Hancock Life Insurance Company (U.S.A.) has entered into a preliminary settlement with certain owners of its universal and variable universal life insurance policies who have policies that contain a contractual promise that “Applied Monthly Rates will be based on [John Hancock’s] expectations of future mortality experience”—and nothing else. The settlement, which awards the policyholders $91.25 million in cash relief, resolves a putative class action lawsuit filed in the Southern District of New York in December 2015.
The Plaintiff, who had a Universal Life Estate Protection policy with John Hancock, contended in the suit that (1) John Hancock should have lowered its cost of insurance (COI) rates to account for improved mortality, (2) John Hancock incorporated improper non-mortality factors into its COI rates, and (3) that John Hancock charged certain improper Age 100 Rider charges. As a result of John Hancock’s actions, Plaintiff asserted that policyholders were forced to pay unlawful and excessive charges and premiums.
The settlement fund will be directly distributed to class members without the need for members to submit claim forms. Additionally, $1 million has been set aside for notice and administration costs.
The case is 37 Besen Parkway LLC v. John Hancock Life Insurance Co., Case No.: 1:15-cv-09924, in the U.S. District Court for the Southern District of New York.
This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.
