People who hold annuities or universal life insurance policies through certain insurers – specifically people who noticed their insurance premiums go up.
What's Going On?
Reports have surfaced that some life insurance companies are engaging in secretive transactions – often through shell and offshore companies – to manipulate the appearance of their financial health to the public. Attorneys are now looking into whether class action lawsuits can be filed on behalf of investors and policyholders who have fallen victim to practices state regulators have called "financial alchemy."
Which Companies Are Affected?
Attorneys are investigating John Hancock Life Insurance Company, Transamerica Life Insurance Company, The Prudential Insurance Company of America, Lincoln Benefit Life Company, Zurich American Insurance Company, ReliaStar Insurance Company, ING Life Insurance and Annuity Company, ING USA Annuity and Life Insurance Company and ING/Voya (sold through subsidiary Security Life of Denver Insurance Company).
Attorneys are investigating potential class action lawsuits on behalf of people who hold annuities or universal life insurance policies through any of the following companies:
John Hancock Life Insurance Company
Transamerica Life Insurance Company
The Prudential Insurance Company of America
Lincoln Benefit Life Company
Zurich American Insurance Company
ReliaStar Insurance Company
ING Life Insurance and Annuity Company
ING USA Annuity and Life Insurance Company
ING/Voya (sold through subsidiary Security Life of Denver Insurance Company)
It has been reported that some insurance companies are engaging in secretive transactions with shell companies in other states and countries to make them seem more financially stable than they actually are.
What Are These “Secretive Transactions” and How Do They Affect Me?
Insurance companies are required by law to maintain a certain amount in reserves to pay out future claims – and then an amount above and beyond this to account for the destruction that follows a terrorist attack or natural disaster. State regulators have found, however, that more than 80 life insurance companies aren’t meeting these requirements and instead masking their financial health through dealings with other companies – transactions that one regulator called “financial alchemy.” It is believed that the practice may extend well beyond these 80 companies and may now be industry wide.
It has been reported that the companies are making financial arrangements with “captive insurers” – entities that are typically located offshore or in other states. Concerns have been raised that the companies are shifting significant liabilities onto these reinsurance companies – many of which are owed by the insurance company itself. These transactions create a false appearance of surplus and financial strength for the insurance company and disguise and understate the risks faced by the company. One retired state insurance examiner said of the practice: “when risk bounces from one entity to another, it often vanishes” from detection by policyholders and financial regulators.
Life Insurance Premium Too High? Insurance Fraud May Be Why
These practices put both policyholders, investors – and the financial economy as a whole – at risk for another economic crisis. In fact, it is believed that insurance companies are passing the expense of their reserves onto their policyholders, which has caused some customers’ insurance premiums to skyrocket.
Big Banks Sued, Lawsuits Say They Misled Investors, Policyholders
A handful of companies have been hit with lawsuits alleging they aren’t maintaining adequate reserves, creating illusion of surplus and falsely representing their financial stability.
These companies include, but are not limited to, the following:
Athene Annuity and Life Company
Fidelity & Guaranty Life Insurance Company
The suits allege that the companies misled their customers into thinking their financial health was much more stable than it actually was because of “reinsurance” transactions. As a result, consumers may have purchased financial products that were significantly less valuable than advertised.
Annuity or Life Insurance Policyholder? Find Out What You Can Do
In light of these allegations, attorneys are speaking to people who hold annuities or whole life insurance policies to help them determine whether they’ve fallen victim to the reinsurance scheme. If you own one of these financial products, we encourage you to speak with an attorney in your area. It doesn’t typically cost anything to speak with a lawyer and you’re not obligated to take legal action if you don’t want to.