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State Farm life insurance rates class action lawsuit overview:
- Who: A judge granted class certification to a lawsuit filed against State Farm Life Insurance Company by David Toms.
- Why: Toms claims State Farm overcharged life insurance policyholders by using unauthorized factors such as profits and expenses to increase monthly insurance charges.
- Where: The class action lawsuit was filed in Florida federal court.
A federal judge in Florida granted class certification to a class of almost 53,000 State Farm Life Insurance policyholders who argue the company used unauthorized factors to charge higher monthly insurance rates.
Plaintiff David Toms claims State Farm used unauthorized factors such as expenses and profits to bump up the monthly charges on his and other individuals’ State Farm universal life insurance policies.
Toms argues State Farm is only allowed to use an individuals age, sex, projected changes in mortality and applicable rate class as factors when determining the monthly cost of insurance rates.
U.S. District Judge Tom Barber, in granting class certification this week, ruled that litigating the claims as a class action lawsuit made sense since all of the class members had the same standardized policy with State Farm.
Further, he determined that State Farm had used the same factors when determining its cost of insurance rates for each of the class members.
Judge rejects State Farm’s argument that policyholders used ‘unreliable’ actuary in complaint
State Farm unsuccessfully argued that an actuary used in the complaint, Scott Witt, had unreliable testimony and was not qualified to testify about life insurance industry practices and customs, Law360 reports.
In his order, however, Judge Barber ruled that Witt provided testimony that was “sufficiently reliable” and specific to the life insurance policy, a Form 94030 policy, which is at the center of the State Farm class action.
“The fact that Witt’s opinions have not attained general acceptance in the relevant expert community is a function of how uniquely tailored Witt’s analysis is to the policies at issue and does not militate in favor of exclusion,” Judge Barber says.
A consumer filed a similar class action lawsuit against State Farm in May, arguing the company concealed inappropriate charges in life insurance monthly cost deductions.
Are you a State Farm Life Insurance policyholder? Let us know in the comments!
The plaintiffs are represented by Norman E. Siegel, Ethan M. Lange and Lindsay Todd Perkins of Stueve Siegel Hanson LLP; John J. Schirger, Joseph M. Feierabend and Matthew W. Lytle of Miller Schirger LLC; and Patrick A. Barthle and John Allen Yanchunis of Morgan & Morgan PA.
The State Farm class action lawsuit is Toms v. State Farm Life Insurance Company, Case No. 8:21-cv-00736, in the U.S. District Court for the Middle District of Florida.
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14 thoughts onState Farm class action alleges company inflates life insurance rates
I have had a universal life policy for years.