It is a bit different than the amended complaint. It took me all of about 30 minutes of research to determine that the structure was a train wreck waiting to happen and anyone getting involved with it should expect it to blow up in their face. Can You File an IUL Lawsuit for False Marketing? I feel my energy is in the right direction, said Vazirani, a recognized industry whistleblower by the Securities and Exchange Commission. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for Orange County. We have to rely on the employees to received their paychecks and then turn around and give it to the trust company. Taking this information, will will help rectify you complaint! But critics say indexed universal life insurance is being sold dishonestly. The IUL Class Action Lawsuit is Hong Li v. Pacific Life Insurance Company, et al., Case No. The lawsuit was filed Aug. 6 in Orange County Superior Courts by plaintiffs Hong Li and Tailong Liu. the content you have visited before, Advertising: Gather personally identifiable information such as name and location, Advertising: Use information for tailored advertising with third parties, Advertising: Allow you to connect to social sites, Advertising: Identify device you are using. The buyer buys the payments at a discount and then receives them going forward. Beginning in 2019, Shurwest began branding itself as The Quantum Group. Hopefully this newsletter will give readers pause next time they look at too good to be true structure. Based on the performance of the chosen market index, which varies depending on the state of the stock market, an IUL policys interest rate will increase or decrease. The attraction of the product rested on an assumption of perpetual 50% option profits, which the complaint describes as an indefensible assumption that is unsupportable, unsustainable and actuarially unreasonable.. AG 49 was adopted by the NAIC in 2015 to rein in IUL illustrations that were showing consumers unrealistic returns. However, this can result in some functions no longer being available. "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. Im in this industry to HELP ADVISORS GIVE BETTER ADVICE TO CLIENTS AND TO KEEP THEM OUT OF TROUBLE! 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.". The issues in Top Class Actions is a legal news source Weve asked them to identify a class and theyve been unable to do it, Kvesic told InsuranceNewsNet. administrator or law firm. Attorneys heading up the claim said proper protocol was not followed. Terms and Conditions. Contact us today to see if you are entitled to join the Indexed Universal Life Policy (IUL) Class False Marketing lawsuit investigation. The high charges do not provide the client with downside protection. a similar story found in many other lawsuits, Economy hits millennials ability to build, transfer wealth, A year after crypto's crash, Philly Bitcoin believers hold on to hope, Jorgen Vik: Don't panic over Social Security rumors, reports. Several consumer groups, policyholders, financial regulators and other insurance companies have even complained about the practice. Learn more about the cookies we use. Chicago. Washington state regulators seek man facing felony insurance fraud charges, Wisconsin seeks policyholders of insolvent Time Insurance Co. products, Find out how you can submit Likewise, Minnesota Life attorneys called the new lawsuit, a frivolous attempt by Plaintiffs (and their counsel) to have a third chance to litigate a failed class claim from the beginning.. 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. Yesterday, Aegon's US subsidiary Transamerica announced an agreement that would resolve class action litigation challenging monthly deduction rate adjustments on certain universal life insurance policies. 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. (the class was certified at the end of 2021). 1) Educate, mentor, and help advisors give better advice to clients (CALM) Please review our Affiliate Link Disclosure for more information. Class Action and Other Lawsuits What's the problem with this awesome sales concept? The ACLIsDolan saysthe size of the premium depends on the returns on the options in the policy. Related: Best Life Insurance Companies of 2023. In the IUL sales structure Im covering in this newsletter, the payment streams were coming from Federal employees (from their pension payments). Well, the agents who got caught up in what appears to be a scam, said no, no, no, no. Your email address will not be published. An indexed universal life insurance policy is different. Top Class Actions is a legal news source lawsuits can be viewedhere. CHICAGO - Class action status has been granted in a lawsuit claiming the City of Chicago illegally issued millions of dollars in unlawful . A lawsuit could also help enact change in the industry and stop insurance companies from engaging in these allegedly deceptive practices. Vazirani and Ron Shurts, a founder of Shurwest, are bitter rivals who have clashed in the past. What you will read in this newsletter is a classic example of me helping an IMO and ultimately hundreds of agents from getting caught up in the lawsuits that are now flying. We bring lawsuits against National Life Group to get life insurance claims paid. In fact, during this time, the policys value allegedly declined from around $638,000 to $593,000. 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. And until you dig deep, IUL appears to have it all. A new lawsuit filed last month adds to the legal liability for Minnesota Life Insurance Co. and its partner independent marketing organization caught up in an alleged pension fraud scam. The primary issues are as follows: There is no telling that this complaint will be successful, but it may have a dramatic affect (win or lose) on our industry. 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. Insurance sales representatives at Pacific Life Insurance Company (PacLife) may be deceiving consumers by presenting marketing misrepresentations about their Pacific Discovery Xelerator indexed universal life (PDX IUL) policies. About Us 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. Critics say that risk is not properly disclosed and is borne by the policyholder. First you have to assume potential clients have a pot of money that could be used to fund an IUL policy for the sole purpose of borrowing from it tax-free in retirement. The case has broad implications for the industry and the controversial Actuarial Guideline 49 put forth by the National Association of Insurance Commissioners, said Kevin Kimmerling, senior vice president and assistant general counsel for Global Atlantic Financial Group. In February 2019, the insurance company launched a new version of their PDX IUL policy the Pacific Discovery Xelerator IUL 2, InsuranceNewsNet reported. A class action lawsuit, also known as a class action or representative suit, is a type of lawsuit where one of the parties is a group of people represented collectively by a member or members of that group. It took two years of hard-fought litigation, but we have accomplished our goal., (More: Transamerica sued for cost increases on universal life insurance contracts). But for thousands of advisors, what I do is keep them out of trouble by reviewing products and sales concepts. This is ClassAction.org's current list of open lawsuits and investigations. *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. Mr. Rosenfield also alleges Transamerica wanted policyholders to relinquish their life insurance so the firm could recoup losses it sustained as a result of low interest rates. Thousands of Illinois drivers cited for using a cellphone while driving could find themselves part of a class action lawsuit. Something to be aware of Transamerica is that they just settled a class action lawsuit about their "cost of insurance . The Forbes Advisor editorial team is independent and objective. 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. On another instance, Xu reportedly represented that the policy would provide an initial death benefit of over $12 million which would grow to over $18 million by the time Li turned 80. 3) I have a software company (OnPointe which had the best investment risk software in the industry (www.onpointeriskanalyzer.com)). such links, we may receive a commission, but it will not result in any additional charges to you. Whats your clients retirement income style? Privacy Policy | Obamacare Premiums Drop For 3rd Consecutive Year, M&A Should Resume In 2021 As Insurers Reinvent: Deloitte, Find out how you can submit Indexed Universal Life Insurance Lawsuits | ClassAction.org Indexed Universal Life Insurance Lawsuit Investigation Last Updated on April 18, 2019 Important Information Attorneys working with ClassAction.org are no longer investigating this matter. By now you may have heard about a class action lawsuit filed in Orange County last week against Pacific Life. I dont know why that was removed from the Amended Complaint. So, IULs are not regulated by the U.S. Securities and Exchange Commission, unlike stocks and options. 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. To read one of the original complaints from 2019, click here. Indexed universal life insurance is in the same class as other permanent life insurance policies, such as whole life insurance. Companies that use false marketing could be in violation of state or federal law, entitling consumers to damages and other relief. Thousands of Illinois drivers cited for using a cellphone while driving could find themselves part of a class action lawsuit. The lawsuits from this structure could bring down an IMO who promoted this structure to agents. 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. Shurwest filed a lengthy bankruptcy settlement plan in November. The fact patterns are perfect examples of poor market conduct including inflated commissions, aggressive claims such as 'guaranteed performance' because it is a 'whole life' product, as well as reduced performance even under modest changes to the illustrated rate. Opposing attorneys representing the Ciofolettis and Stospal are forum shopping a proposed class action that was rejected by a Minnesota court, Kvesic said. Top Class Actionss website and social media posts use affiliate links. What part of this structure looks like it is one that will protect our clients investments? View Guidelines. However, after two years of paying $500,000 annual premiums, Li reportedly started to notice significant losses. Follow him on Twitter @INNJohnH. Shurwest reported current gross income of about $125,000-$150,000 per month, and future operating expenses to be $35,000-$40,000 per month. Federal requirements are set forth in Rule 23 of the Federal Rules of Civil Procedure. For one thing, after a few years the insurer may lower thecrediting cap,which is the maximum amount it allows the policyholder to earn on the policy when options do well, says Wealth Managements Roth. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for the County of Orange. 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. It isbelieved that some companies, including AXA Equitable and Pacific Life, may have used misleading financial return illustrations when selling their permanent life insurance policies. This website is not intended for viewing or usage by European Union citizens. 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)! The answer to all of these very simple questions was NO! 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 information here is for reference only. Were optimistic that the court is going to grant Shurwests motion to dismiss the complaint.. YorkBridge, Beacon Pointe's largest acquisition so far in 2023, was founded in 2016 by Carrie Gallaway and Andrew Stern. Consumers may be able to file an IUL lawsuit if their insurance provider misrepresented the policys performance with false marketing promises. ", Although a class-action filing, the Li/Lui lawsuit names the agent along with the insurer. He discussed the case last week at the American Council of Life Insurers' 2020 Annual Conference, conducted virtually. State court rules can differ. If your insurance company misrepresented the performance potential of your indexed universal life policy, you may be able to file an IUL 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. The three plaintiffs purchased Minnesota Life IUL products from Shurwest producers. If you received a data breach notification or feel your Read More, Radius Health, Inc. Merger Terms May Have Harmed Stockholders An investigation into the fairness of the sale of Radius Health, Inc. (Radius or the Company) (NASDAQ: RDUS) to Gurnet Point Capital (Gurnet Point) and Patient Square Capital (Patient Square) has commenced. Interest rates are determined by the underwriter of the universal life policy but with a contractual minimum which is usually around 2%. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for Orange County. 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. Nelnet Servicing Data Leak Your Personal Information At Risk! such links, we may receive a commission, but it will not result in any additional charges to you. This article literally said NOTHING. With the structure payments, you are actually increasing the premium that goes into the IUL! But the Center for Economic Justices Birnbaum says insurance agents often use optimistic projections, or illustrations,to show the gains these policies can earn over the years. Opinions about indexed universal life insurance vary, but critics warn that its not the riskless investment it may be sold as, and you could lose it all. They are complex products sold with false promises and deceptive marketing, says Birny Birnbaum, executive director of the nonprofit Center for Economic Justice. administrator or law firm. According to their lawsuit, the Ciofolettis and Stospal were sold IUL policies accompanied by a Future Income Payments feature. Pacific Life Insurance Company describes their PDX policies as able to provide lifelong protection and supplemental retirement income through tax-free loans. Others may be representing a higher growth rate of the stock index than what most financial experts would believe to be reasonable. Axa Equitable Life Insurance and Lincoln National Corp. are also facing litigation for raising the costs of their universal life policies. Economy hits millennials ability to build, transfer wealth, A year after crypto's crash, Philly Bitcoin believers hold on to hope, Jorgen Vik: Don't panic over Social Security rumors, reports. Although IUL policies have the potential for high rates of growth, the policies also have the risk of no growth if a stock market index performs fully. By now you may have heard about a class action lawsuit filed in Orange County last week against Pacific Life. Class actions can be brought in federal court or state court. It is a bit different than the amended complaint. Thats more than most hedge funds. 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. Li and her husband reportedly met with Sky Vision Insurance and PacLife on several occasions in 2018. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for the County of Orange. To read the complaints filed against Minnesota Life, Shurwest, and several other defendants, and to read a separate CLASS ACTION complaint against Minnesota Life, click on the following link: One question I get quite often from advisors who have been getting my newsletters is: what exactly do you do? According to Harvey Rosenfield, an attorney with Consumer Watchdog who represented the plaintiffs, Transamerica notified policyholders in 2015 that it was increasing charges by as much as 38% on universal life insurance packages originally sold in the late 1980s and early 1990s. Past performance is not indicative of future results. 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. Before commenting, please review our comment policy. PacLifes PDX PIUL policy is the riskiest and most leveraged IUL product in the industry and is is impossible to understand, impossible to explain to clients and impossible [for agents] not to sell, simply because it illustrates the best, reads the lawsuit. However, these life insurance policies differ from others because IUL policies grow according to the performance of a stock index. Are you sure you want to rest your choices? Go on and tell us about your poor consumer experience. Its not good business to work with an insurance company you cant trust! Recently, a class-action lawsuit was filed against Pacific Life regarding its popular and controversial PDX Index Universal Life (IUL) product. PLEASE EMAIL ME IMMEDIATELY TO SET UP A CALL. What has happened is exactly what I predicted would happen when I saw the structure nearly two years ago. 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? One insurer charges upwards of 8% of the premiumsand cash value in the policy in the first year alone, according to Steven Roth, president of Wealth Management International, an insurance analyst and litigation consultant. The Performance Factor is 'intentionally misleading and deceptive', based on the fact that it is not disclosed to the customer and only described in marketing materials - not to any details as to understand the risks. Regulators vowed to keep a close eye on sales practices and did not rule out reopening the new AG 49A should they see abuses resume. The structured payment company that was responsible for investing the money of clients and generating the payment streams needed to fund all the IUL policies is NO LONGER PAYING! What is an SPS? It's a legal proceeding in which one or several plaintiffs (the complainants) bring a suit on behalf of their "class.". , Can I join this law suit against Pacific Life. Its truly amazing that Minnesota Life and one of the bigger IMOs in the industry fell for this plan. Unfortunately, Pacific Life Insurance Company has been accused of taking advantage of the need for this insurance by trapping consumers in ill-performing indexed life insurance policies. During this meeting, their agent Tiffany Xu reportedly encouraged them to take out an Indexed Universal Life policy based on false and misleading representations of the policys performance. 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. There are now at least 52 insurers selling indexed universal life insurance, says Barry Flagg, president of Veralytic, a life insurance products rating service. The IUL sales structure I will talk about in this newsletter I saw a few years ago. Minnesota Life would be sued itself by several disgruntled clients. The goal of this section is to provide consumers with a comprehensive resource on class action and mass tort lawsuits. Recently, a recognized industry whistleblower by the policyholder IUL ) class False?. Companies that use False Marketing could be in violation of State or federal,... Your indexed universal Life policy, you may be representing a higher growth rate the! The right direction, said no, no policyholders, financial regulators other. In any additional charges to you at the end of 2021 ) being available you you... Size of the stock index a scam, said no, no, no to $ 593,000 im this. Deep, IUL appears to be reasonable with Sky Vision insurance and PacLife several. 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