TOLI Trustee Alert: Update on Transamerica COI Settlement

In October of last year, we reported on a settlement in the case against Transamerica for a cost of insurance (COI) increase, which raised the carrying costs on a group of universal life policies by 200% or more.  In one example, we reported the cost to maturity on one policy in our portfolio jumped from $36,400 to $81,595, after the policy got hit with a [...]

Court Case Shows the Potential Liability for an Advisor, Attorney or CPA Acting as Administrator (or Trustee) of a Life Insurance Trust

Twenty-one years ago, Charles Hunter Montgomery set up a life insurance trust naming his daughter, Kimberly, as trustee. He was guided on the purchase by his longtime advisors at a major wirehouse firm in his hometown, who also agreed “to administer the investment account to maintain that life insurance policy .” (1) The policy, a $2M survivorship life policy on Charles and his wife, was [...]

Trust Owned Life Insurance (TOLI) Year End Review for 2018

First, we want to thank all ITM TwentyFirst clients for another remarkable year of growth. Without the support of our partners at banks, trust companies, family offices, and law firms across the country, we could not sustain the growth that has made us the largest manager of in-force life insurance in the country.  So, thank you for that. One reason for our growth over the [...]

Newspaper Headlines Highlight Changes in Life Insurance (and TOLI) Business

On October 30th, Voya Financial, a company we wrote about because of a lawsuit filed against it for cost of insurance increases that occurred on universal life policies sold in the past under the Security Life of Denver banner, announced in its third-quarter earnings call it would be ceasing all life insurance sales as of the end of the year. The company, which was spun [...]

Lawsuit Filed Against Security Life of Denver for COI Increase Moving Ahead

A class-action lawsuit against Security Life of Denver, initially filed in July of 2018, is moving ahead in Colorado.  The lawsuit alleges policyholders have paid “unlawful and excessive” cost of insurance charges on Strategic Accumulator Universal Life and Life Design Guarantee Universal Life policies subject to increases announced in September of 2015. The suit contends that there is “no possible justification” for the increase since [...]

2018-10-15T16:40:36-05:00October 15th, 2018|Cost of Insurance (COI) Increase|0 Comments

Transamerica Settles Cost of Insurance Increase Litigation

In 2015 we reported on a Transamerica cost of insurance (COI) increase on a block of universal life policies and illustrated the 40% increase in COI on one policy affected raised the annual carrying costs to maturity for that policy from $36,400 to $81,595.  That cost increase led to three separate class action lawsuits that were consolidated into one claim in November of 2016. Preliminary [...]

California Issues Regulations Concerning Cost of Insurance Increases on Life Insurance

Almost exactly a year ago, we wrote about a new regulation implemented by the New York State Department of Financial Services to “govern life insurance company practices related to increases in the premiums” of life insurance and annuity policies. That regulation required carriers raising rates on policies to notify the department “at least 120 days prior to an adverse change in non-guaranteed elements of an [...]

Lawsuit Filed Against Voya Cost of Insurance (COI) Increase

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 [...]

ITM TwentyFirst Alert: Lawsuit Filed Against John Hancock for COI Increase

In February of 2017 we reported John Hancock had placed restrictions on certain inforce illustrations. At that time, we mentioned this was a possible precursor to a cost of insurance increase.  A year later the carrier notified the New York Department of Financial Services that it would be raising the cost of insurance (COI) on some Performance UL policies. Last month we reported the first [...]

First John Hancock Cost of Insurance (COI) Increase Letters Arrive

In February of 2017 we reported John Hancock had placed limitations on inforce ledgers for certain Performance UL policies.  A year later, in February of this year, we wrote that The Life Settlements Report, a trade publication, reported that John Hancock had voluntarily notified the state of New York that it would be raising the cost of insurance (COI) on 1,700 Performance UL policies. Today, [...]