Approval Slated for $73 Million Settlement of Life Insurance Class Action Alleging Unlawful Rate Increase

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United States District Judge Howard Matz of the Central District of California indicated yesterday that he would preliminarily approve a proposed $73 million settlement of a class action lawsuit against Conseco Life Insurance Company.

The case was filed in 2011 after the named plaintiff, Celedonia Yue, obtained a judgment in a separate action declaring that premium rate hikes and cost-of-insurance increases (monthly charges based on the insured’s age) violated her policy’s provision for determining cost-of-insurance rates. 

The class action, which includes more than 45,000 California policyholders, consists of both policyholders with in-force policies and former policyholders whose policies lapsed or were terminated in connection with the increases. The proposed settlement, among other things, will reduce the premium and cost-of-insurance increases and allow for reinstatement of terminated or lapsed policies. Former policyholders who do not wish to reinstate their policies are eligible for a cash payment.

A further hearing is set for March 7, 2013. Barger & Wolen will continue to follow this case.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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