Lawsuit Claims Wilco Life Insurance Co. Canceled Policies Without Sending Proper Notice

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Wilco Life Insurance Company faces a proposed class action that claims the insurer has unlawfully failed to provide policyholders with proper notice of the pending cancellation of their policies for non-payment, and of their right to designate another recipient for such notice.

The 17-page case alleges the defendant’s failure to adhere to the notice provisions of the California Insurance Code has caused the company to wrongfully deny life insurance policy proceeds to the beneficiaries of policies that were canceled for non-payment without proper notice.

The lawsuit was filed by the son of a woman who purchased a flexible premium universal life insurance policy from Wilco, who previously did business as Conseco Life Insurance Company and Massachusetts General Life Insurance Company, in June 1998 with an initial premium payment of more than $45,000. According to the case, the plaintiff’s mother made subsequent payments of nearly $32,000 in August 1998 and over $4,000 in November of that year. The beneficiary under the policy was a trust for which the plaintiff was the trustee, the suit relays.

The lawsuit alleges that after the plaintiff’s mother died in October 2014, the plaintiff submitted a claim to Wilco but was informed that the policy had lapsed for non-payment in July of that year. Per the case, however, the plaintiff never received notice that the policy would lapse, despite being the trustee for the policy’s beneficiary.

According to the suit, Wilco was required under the California Insurance Code to notify the plaintiff’s mother, as the policyholder, every year of her right to designate someone to receive notices of cancellation. The case alleges that the defendant failed to do so, and also failed to send notice to the plaintiff at least 30 days prior to the policy’s cancellation for non-payment.

The lawsuit notes that an August 2021 California Supreme Court decision found that the relevant sections of the state’s Insurance Code applied to policies issued before January 1, 2013, and that non-payment cancellations that did not comply with those statutes were invalid.

“Despite these rulings and the state of the law in California, WILCO has failed and refused to pay life insurance proceeds of invalidly canceled policies to the Plaintiff and the putative class,” the complaint attests.

The lawsuit looks to represent anyone who was entitled to receive proceeds under a life insurance policy issued by Wilco and whose claim was denied on the basis that the policy had been canceled for non-payment when Wilco had, at least 30 days prior to the cancellation’s effective date, failed to mail a notice of the pending cancellation to a designee named in accordance with the California Insurance Code and a known assignee or other person with an interest in the individual life insurance policy. The suit covers the period of time from January 13, 2013 to the present.

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