Lincoln Cost of Insurance Litigation

Because of the number of policies involved in this case, interim class counsel established this website in order to notify putative class members of the case and to apprise them of important developments and key filings. This website also provides contact information should policyholders seek additional information, or want to become involved in the lawsuit. This website was not established pursuant to any court order, nor have its contents been approved by any court.

The lawsuits allege that Lincoln and First Penn-Pacific charged and collected excessive COI charges not allowed by the terms of the policies. Cost of insurance charges, also known as mortality charges, represent the largest amount that universal life policyholders pay for their life insurance. The lawsuits allege that Lincoln and First-Penn Pacific based cost of insurance rates on factors other than expectations of future mortality experience and failed to adjust cost of insurance rates to reflect improvement in its mortality expectations.

The marketing names of the Lincoln impacted products can be viewed here and First Penn Products here.

A copy of the First Amended Complaint against Lincoln can be found here. A copy of the First Amended Complaint against First Penn-Pacific is available here.

The lawsuits involve hundreds of thousands of “single consideration” universal life insurance policies issued by Lincoln, First Penn-Pacific, and their predecessors-in-interest, including Alexander Hamilton Life Insurance Company, Jefferson-Pilot Life Insurance Company, Kentucky Central Life Insurance Company, Chubb LifeAmerica Company, and Volunteer State Life Insurance Company. The alleged class is defined as follows:

All current and former owners of universal life (including variable universal life) insurance policies issued by either First Penn-Pacific Life Insurance Company or The Lincoln National Life Insurance Company, or their predecessors, that provide:

1. An insurance or cost of insurance charge or deduction calculated using a rate based on expectations of future mortality experience;
2. Additional but separate policy charges, deductions, or expenses;
3. An investment, interest bearing, or savings component; and
4. A death benefit.

The subject policies were typically issued between 1980 and 2005.

The lawsuits are pending in the United States District Court for the Eastern District of Pennsylvania, Case Nos. 2:18-cv-02989-RBS and 2:18-cv-01573-RBS. However, the case involves policies issued across the United States.

Even if your policy lapsed or was surrendered, you may still be part of the class and have claims. Please contact interim class counsel if you have questions.

No. Motions for class certification are not due until September 16, 2020. Until the class is certified, members of the alleged classes are not parties to the lawsuit and are free to bring their own lawsuits or otherwise protect their interests. If the cases are certified as class actions, class members will be provided notice and the opportunity to opt out. If class members do not opt out, they will be entitled to participate in any settlement or damages award, and they will be bound by the results of the litigation. More details will be provided in the notice that you will receive in the event the class is certified. If the class is not certified, it is likely that no notice will be issued.

Please contact interim class counsel. It has recently been discovered that many insurers have been engaging in similar conduct as Lincoln. Susman Godfrey is currently litigating cost of insurance cases against Protective Life, AXA Equitable, ReliaStar, Security Life of Denver, North American, PHL Variable, and John Hancock.