In May of 2016 we reported that the cost of insurance was being raised on a specific block of approximately 18 universal life products originally issued by Aetna Life Insurance and Annuity Company (now Voya Retirement Insurance and Annuity Company.) Lincoln Financial Group was the administrative agent and reinsurer on the policies. We were unsure of the total number of policies affected.
Last week (August 15th) a Motion for Certification was filed in the United States District Court – Southern District of New York questioning whether Voya “breached the standardized, form insurance policies owned by all members of the proposed Class by raising cost of insurance (“COI”) rates, and whether Aetna’s reinsurer, Lincoln, was unjustly enriched as a result.”
The heavily redacted document points out that any change in COI on the policies in question were to be based on “estimates for future cost factors,” and be applied across an entire class on a “uniform or nondiscriminatory” basis. The Complainant stated that they will present evidence “Aetna breached these contractual provisions, and that Lincoln was unjustly enriched.”
According to the court document, the New York Department of Financial “agreed that the rate hike was illegal” and the carriers “abandoned the increase in New York, but proceeded to impose the same illegal overcharges” on policies outside the state, “even though those policies have the same terms as those in New York, and there is no actuarial or other basis whatsoever to justify discriminating between New York and non-New York policy owners or insureds.”
The Plaintiffs contend that the increase was “unlawfully based on Lincoln’s estimates of Lincoln’s future profits, rather than Aetna’s estimates of its future costs,” as is required in the policy contract and “Aetna failed to impose the COI rate hike on a class basis, as each policy requires.”
The court document was filed on behalf of Helen Hanks who purchased a Universal Life 83 (Aeconoflex) policy issued by Aetna and requests that the court certifies “the class defined in the Complaint” and appoints Helen Hanks as Class Representative.
As this case proceeds we will keep you posted.