What is the lawsuit about?
PHT Holding II LLC has filed a class action against North American Company for Life and Health Insurance (“Defendant”) for allegedly imposing unlawful cost of insurance (“COI”) charges on Classic Term UL I and II policyowners. The class action lawsuit alleges that Defendant breached its contracts with certain policy owners. Plaintiff’s policy states, in part:
Cost of Insurance. The cost of insurance for the Insured is determined on a monthly basis. Such cost is calculated as (1) times (2), where: (1) is the cost of insurance rate as described in the Cost of Insurance Rates section. (2) is the net amount at risk, as defined in the Changing Death Benefit Options provision.
Cost of Insurance Rates. The monthly cost of insurance rate is based on the sex, attained age, and rating class of the Insured. Policy duration is also a factor in determining the monthly cost of insurance rates. Attained age for the initial Specified Amount means age nearest birthday on the prior policy anniversary. Attained age for any increase in Specified Amount or increase in net amount at risk applied for when changing Death Benefit options means age nearest birthday on the prior anniversary of the date such increase became effective. Monthly cost of insurance rates are determined by us, based on our expectations as to future mortality experience. Any change in cost of insurance rates applies to all individuals of the same class as the insured. Under no circumstances are cost of insurance rates for insureds in that standard risk class greater than those shown in the Table of Guaranteed Maximum Insurance Rates. Age nearest birthday is used in determining such guaranteed maximum rates.
Plaintiff alleges that Defendant breached these contractual provisions because Defendant imposed COI charges that were not based on its expectations as to future mortality experience, and that Plaintiff and members of the Class have been damaged as a result. Defendant denies Plaintiff’s claims and asserts multiple defenses, including that COI rates were set in compliance with the contract, have never been changed, and remain in compliance with the contract.
Who is included?
The Class consists of all current and former owners of Classic Term UL I or II issued or insured by North American Company for Life and Health Insurance, or its predecessors, during the Class Period.
The “Class Period” starts on the following dates through the date of final judgment in this action:
| Start Date of Class Period |
Classic Term UL I or II Issue State |
| October 30, 2008 |
Illinois, Indiana, Iowa, Kentucky, Louisiana, Rhode Island, West Virginia,
and Wyoming |
| October 30, 2010 |
Montana and Ohio |
| October 30, 2012 |
Alabama, Arizona, Connecticut, Georgia, Hawaii, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, South Dakota, Tennessee, Utah, Vermont, Washington, and Wisconsin |
| October 30, 2013 |
Arkansas, Florida, Idaho, Kansas, Missouri, Nebraska, Oklahoma,
and Virginia |
| October 30, 2014 |
California, Pennsylvania, and Texas |
| October 30, 2015 |
Alaska, Colorado, Delaware, Maryland, New Hampshire, North Carolina, South Carolina, and Washington, D.C. |
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