Genworth Life Insurance Company Class Action Settlement

Genworth Life Insurance Company has agreed to pay up to $24.5 million to end a class action lawsuit alleging the company withheld information about rate increases from long-term care policyholders.

Class Members who can benefit from the settlement include those who purchased life insurance Genworth sold and then substantially increased premiums on starting approximately 2012. A list of policies included is available on the settlement website.

A group of policyholders lodged the class action lawsuit against Genworth Life Insurance Company after allegedly experiencing such premium increases.

They claimed that the disclosures of material information regarding life insurance Genworth sold to them and others was insufficient and the premium increases were unexpected.

“This case does not challenge Genworth’s right to increase these premiums, or the need for premium increases given changes in certain of Genworth’s actuarial assumptions. Nor does this case ask the Court to reconstitute any of the premium rates or otherwise substitute its judgment for that of any insurance regulator in approving the increased rates,” stated the complaint.

“Rather, this case seeks to remedy the harm caused to Plaintiffs and the Class from Genworth’s partial disclosures of material information when communicating the premium increases, and the omission of material information necessary to make those partial disclosures adequate.”

The plaintiffs said that they each purchased life insurance Genworth sold to help cover high long-term care costs. The policies were meant to help with expenses related to assisted living facilities and skilled care that are not covered by health insurance or federal medical programs.

According to the class action lawsuit, the plaintiffs and Class Members compared the premium rates to coverage options to determine whether the plan would be affordable.

As a part of these long-term care plans, policyholders commit to paying years of premiums; however, the plaintiffs say that they and other Class Members were not given sufficient information about how these premiums would increase over the years.

As a result, they say that they paid years of premiums, but ended up walking away with nothing as the payments became too expensive and policyholders let their insurance lapse.

“Without this material information, Plaintiffs and the Class could not make informed decisions in response to the premium increases and ultimately made policy option renewal elections they never would have made had the Company adequately disclosed the staggering scope and magnitude of its internal rate increase action plans in the first place,” the Genworth Life Insurance Company lawsuit claimed.

The class action lawsuit alleged that Genworth Life Insurance Company advertised that premium increases on its long-term care plans would be non-existent or minimal. As a result, many policyholders agreed to purchase a plan and paid premiums for many years, sometimes a decade.

According to the complaint, cracks in Genworth’s financial stability began to show in 2012 when the company announced that it was experiencing a shortfall in the reserves it had to cover its long-term policyholders when they needed to use the insurance. As result, said the plaintiffs, the company hit policyholders with massive premium increases ranging from 44 to 66 percent.

“None of the details of this massive rate increase plan, however, were shared with policy holders,” alleged the complaint.

For its part, Genworth admits no liability, but has agreed to pay policyholders varying sums as a part of a settlement to end the class action lawsuit.

Under the terms of the settlement, Class Members may be entitled to either a $100 credit toward future premium payments, if they are still paying on the policy, or a one-time $100 addition to their non-forfeiture option benefit pool.

Additionally, the company has agreed to issue a special election letter disclosing information about future rate increases and giving Class Members the right to maintain their current benefit level at the rate they currently pay or selecting a “reduced paid-up benefit option” or reduced benefit. The special election letter must be returned to the company within 90 days of receipt.

Class Members will be automatically entered into the class action settlement. The deadline for Class Members to exclude themselves or object is June 13, 2020. The final hearing is scheduled for July 10, 2020.

Who’s Eligible

Class Members include “Policyholders of Class Policies excluding: (1) those Policyholders of Class Policies whose policies went into Non-Forfeiture Status prior to January 1, 2014; (2) those Policyholders of Class Policies that entered a Fully Paid-Up Status at any time up to the date the Class Notice is mailed; (3) any Policyholder whose Class Policy is lapsed and is outside any period Genworth allows for the Class Policy to be automatically reinstated with payment of past due premium, or whose Class Policy has otherwise terminated, as of the date of the Class Notice; or any Policyholder whose Class Policy is lapsed and is outside any period Genworth allows for the Class Policy to be automatically reinstated with payment of past due premium or has otherwise terminated, as of the date the Special Election Letter would otherwise be mailed to the Policyholder; (4) Genworth’s current officers, directors, and employees as of the date Class Notice is mailed; and (5) Judge Robert E. Payne and his immediate family and staff.”

Additional definitions and a list of policies covered by the settlement are available on the settlement website.

Potential Award

$100 credit to future premium payments or added to Class Members’ non-forfeiture option benefit pool.

Class Members may also opt to reduced premiums in the future or reduced benefits by responding to a special election letter within 90 days of receipt.

Proof of Purchase

No proof required. Class Members will be automatically entered into the settlement.

Claim Form

There is no claim form for this settlement. Class Members can find out more about this settlement by clicking here. 

Exclusion/Objection Deadline

6/13/2020

Case Name

Jerome Skochin, et al. v. Genworth Life Insurance Company, et al., Case No. 3:19-cv-00049-REP, in the U.S. District Court for the Eastern District of Virginia

Final Hearing

7/10/2020

Settlement Website

LongTermCareInsuranceSettlement.com

Claims Administrator

Skochin v. Genworth Settlement Administrator
c/o Epiq Global
P.O. Box 4230
Portland, OR 97208-4230
admin@LongTermCareInsuranceSettlement.com
1 (833) 991-1532

Class Counsel

Brian D. Penny
GOLDMAN SCARLATO & PENNY PC

Stuart A. Davidson
ROBBINS GELLER RUDMAN & DOWD LLP

Jonathan M. Petty
PHELAN PETTY PLC

Glen L. Abramson
BERGER MONTAGUE PC

Defense Counsel

Reid Ashinoff
DENTONS US LLP

Brian Pumphrey
MCGUIREWOODS LLP

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