AmGen Class Action Lawsuit: Life Insurance Policyholders Were ‘Cheated’

If you are a current or former owner of American General Life Insurance (AmGen) policies in California, you may be eligible to become a member of a class action lawsuit against the insurance company. AmGen “cheated” California policyholders out of tens of millions of dollars by artificially keeping interest rates low on amounts deposited in their accounts, according to the class action lawsuit.

Which AmGen Life Insurance Policyholders May Be Affected?

Universal life insurance policies issued in California by AmGen — which also include terms indicating that redetermination of interest rates will be based “only on expectations of future investment earnings” — are the policies at issue in the AmGen class action lawsuit.

These universal life insurance policies include a combined savings component and insurance component. The savings component is referred to in the AmGen policy as the “accumulation value,” and policyholders earn interest on the accumulation value held in the account. The amount in the account is then used to pay for the cost of insurance and other charges.

The interest rates are redetermined by AmGen either quarterly or annually, according to the AmGen class action lawsuit, and a guaranteed minimum interest rate is set forth in the life insurance policy.

However, plaintiff LSIMC alleges that AmGen wrongfully credits an artificially low interest rate, deliberately shortchanging policyholders in order to make more money.

AmGen Allegedly Concealed Wrongdoing From Policyholders

LSIMC reportedly did not learn of any breach of policy by AmGen until October 2020 when actuarial experts and lawyers reviewed the life insurance policy, according to the AmGen class action lawsuit.

“The nature of AmGen’s conduct is such that Plaintiff and each member of the proposed class would be unaware that AmGen was engaging in wrongdoing, and AmGen has in fact affirmatively concealed its wrongdoing,” the class action lawsuit states.

AmGen alone possesses the internal rate projections that are supposed to determine current interest rates, and AmGen does not disclose this information to policyholders, explains the class action lawsuit. 

Policyholders would have no way to know that they are being ripped off without a disclosure of AmGen’s projected earned interest rates or the method by which credited rates are calculated, the plaintiff says.

“AmGen is aware that it has superior and in fact exclusive knowledge of its own expectations of future investment earnings, and has in fact used this disparity of knowledge to exploit and cheat policyholders,” the AmGen class action lawsuit says.

Who’s Included in the AmGen Class Action Lawsuit?

The American General complaint defines the proposed Class as: “All current and former owners of life insurance policies issued by American General Life Insurance Company, or its predecessors, in the State of California on policy forms that provide that any redetermination of interest rates will be based ‘only on expectations of future investment earnings.’”

The AmGen class action lawsuit asserts claims for breach of contract and violation of California’s Unfair Competition Law. The plaintiff seeks compensatory damages, restitution and/or disgorgement, pre- and post-judgment interest, attorneys’ fees and costs, and other relief the court deems proper.

LSIMC is represented by Steven Sklaver, Ryan C. Kirkpatrick and Seth Ard of Susman Godfrey LLP.

The AmGen Life Insurance Class Action Lawsuit is LSIMC LLC v. American General Life Insurance Co., Case No. 2:20-cv-11518, in the U.S. District Court for the Central District of California, Western Division.