A Pennsylvania appellate court on Tuesday affirmed a $300,000 judgment against Riversource Life Insurance Co. in a suit accusing the insurer and its agent of making fraudulent misrepresentations in the sale of a couple's policy, concluding that the evidence supported the trial judge's findings.

In January 1996, the agent told policyholders  that their policy was outdated and recommended that it be replaced with a "variable" universal life insurance policy providing for the same level of coverage for the same $50 monthly price.  However, the policyholder's first bill for the new policy was for $150, which the agent said was merely a mistake. The policyholders paid their $50 monthly bills thereafter for more than four years. The policyholders were then told that they needed to increase their premium payments to $150 per month or lose the guaranteed death benefit rider.

Both an insurance company vice president and the policyholders' sales practices expert later testified that the amount necessary to guarantee the policy would be funded for its entire duration was $240 per month, court documents said.

After conducting a bench trial, the trial Judge ruled that the defendants had violated the Unfair Trade Practices and Consumer Protection Law ("UTPCPL") because they purposefully and intentionally misrepresented the life insurance policy's terms, and the policy as issued and delivered differed materially from the policy that was sold. The judge awarded the policyholders $125,000 in statutory damages and $175,000 in attorneys' fees and costs.  Yesterday, the Pennsylvania Superior Court affirmed the judgment.