Wolf Haldenstein Files Class Action Against Banner Life On Behalf Of Insureds, For Improper Rate Increases
New York – December 7, 2016 – Wolf Haldenstein Adler Freeman & Herz (“Wolf Haldenstein”) has filed a class action lawsuit against Banner Life Insurance Company (“Banner”) for subjecting the owners of certain universal life insurance policies to sudden and massive increases in cost of insurance (“COI”) rates.
The Complaint alleges that Banner breached the terms of many of its universal life insurance policies (the “Policies”) by, inter alia, drastically increasing COI rates for reasons specifically prohibited by the Policies. By their express terms, the Policies provide that any modifications to the COI rate after a Policy is issued can be based only on changed circumstances as to future mortality experience, and also explicitly prohibit using COI rate increases to recoup prior losses. Nevertheless, as alleged in the Complaint, Banner instituted exorbitant increases to the COI rates on the Policies as recently as July 2015 because of, among other things, its inability to cover the guaranteed interest rates it promised to policyholders and its parent company’s insatiable demand for dividend payments.
The Complaint specifically details the enormous COI increases to which consumers have been subjected, and explains some of the ways in which these tremendous COI increases are meant to impermissibly recoup prior losses. Ultimately, owners of the Policies have been forced to choose among three unappealing options: (1) pay as much as six times the current COI rate to maintain the face value of the Policy; (2) pay an increased monthly premium, along with a “surrender charge” of multiple thousands of dollars, in exchange for maintaining the Policy at a substantially reduced face value; or (3) abandon the Policy entirely, abandoning the premiums that have already been paid in some cases for over a decade, and take the risk of being unable to secure alternate life insurance. Left with these nearly impossible choices, many individuals who have owned their Policies for decades – and paid Banner hundreds of thousands of dollars in premiums – have lost most or all of the benefits for which they paid. Wolf Haldenstein is also investigating similar COI increases instituted by Banner’s subsidiary, William Penn Life Insurance Company of New York.
The Complaint, Robert S. Appel Irrevocable Insurance Trust et al. v. Banner Life Insurance Company, Case No. 1:16-cv-08880 was filed in the United States District Court for the Southern District of New York.
Wolf Haldenstein has extensive experience in the prosecution of complex class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas including investor protection, consumer protection and workers’ protection. The reputation and expertise of Wolf Haldenstein in shareholder and other complex class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex multi-district and consolidated litigation. You may also follow Wolf Haldenstein and learn about newly filed cases on Twitter and Facebook.