Transamerica Reaches $195M Life Insurance Rate Class Action Settlement

Life insurance policyholders have secured a $195 million settlement with Transamerica in return for ending a class action lawsuit over unexpected rate increases.

Lead plaintiffs alleged in a class action lawsuit that Transamerica violated contracts with policyholders when it unfairly increased their monthly rates.

The rate increase was steep, said the plaintiffs, as well as unexpected.

The Transamerica insurance rate increase class action lawsuit alleged that customers were hit with drastic rate increases on their $500,000 and $250,000 life insurance policies from the company in June 2015.

The plaintiffs claimed that the rate increase was in violation of Transamerica’s policy contract that limited the amount that could be deducted from the policyholders’ accounts each month.

Under the terms of the policy, according to the Transamerica insurance rate class action lawsuit, either a minimum premium or a higher premium could be paid to maintain the insurance.

Policyholders who elected to pay a higher premium had extra money put into a different interest-bearing account that Transamerica drew from each month to maintain the coverage.

However, between 2015 and 2016, Transamerica began raising their rates to allegedly make up for persistent low interest rates – a violation of the insurance policy contract, alleged the Transamerica insurance class action lawsuit.

“The settlement is the product of several years of complex and hard-fought litigation by experienced class action law firms from across the country, the exchange and review of approximately one million pages of complicated insurance related documents and electronic data, months of arms-length negotiations, extensive expert analysis and a mediation overseen by a nationally recognized and well-respected mediator, David Geronemus, of JAMS,” states the plaintiffs’ motion for preliminary approval of the Transamerica insurance rate class action settlement.

Under the terms of the Transamerica insurance rates settlement agreement, Class Members will include those who held universal life insurance from the company who were hit with rate increases between 2015 and 2016 – approximately 70,000 people, according to the motion for preliminary approval of the settlement.

“The charges that Transamerica applied to people who owned these universal life insurance policies caused tremendous surprise and stress for the people who received them, many of whom are now senior citizens, and some of whom are quite elderly and on fixed incomes,” notes a statement issued regarding the settlement from the nonprofit consumer protection organization Consumer Watchdog and representative for the plaintiffs in the class action lawsuit.

“Our number one goal was to get as much money as we could back to these policyholders as quickly as possible. It took two years of hard-fought litigation, but we have accomplished our goal.”

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The plaintiffs and proposed Class are represented by Andrew S. Friedman and Francis J. Balint Jr. of Bonnett Fairbourn Friedman & Balint PC, Adam M. Moskowitz and Howard Bushman of The Moskowitz Law Firm and Harvey Rosenfield and Jerry Flanagan of Consumer Watchdog.

The Transamerica Insurance Rate Class Action Lawsuit is Gordon and Mary Feller, et al. v. Transamerica Life Insurance Co., Case No. 2:16-cv01378, in the U.S. District Court for the Central District of California.