FOR IMMEDIATE RELEASE
CONNECTICUT GENERAL LIFE INSURANCE COMPANY TO PAY POLICYHOLDERS MILLIONS TO SETTLE CLAIMS THAT COMPANY AGENTS DEFRAUDED POLICYHOLDERS AND TO SETTLE TAX LAWSUIT
LOS ANGELES, CALIFORNIA --
On January 13, 1997, the United States District Court in Los Angeles approved the settlement of two class actions against Connecticut General Life Insurance Company ("CGLIC") that were consolidated as In re Connecticut General Life Insurance Company Premium Litigation, MDL Docket No. MDL-1136. The class actions alleged that: (1) CGLIC committed fraud and misrepresentation in the sale of life insurance policies by, among other things, falsely representing the number of payments that would be required for the life insurance policies sold to the Class; and, (2) CGLIC improperly included the effects of certain provisions of the Omnibus Budget Reconciliation Act of 1990, known as the "DAC Tax," in determining flexible components in certain life insurance policies. The settlement of the case provides substantial benefits to all current or former owners of CGLIC individual whole, universal, and participating life insurance policies bought between August 1, 1983 and March 26, 1996, excluding CGLIC’s Corporate Owned Life Insurance products.
Although previously given a right to opt out of the settlement, "unlike similar, recent large settlements involving other major insurance companies, virtually none of the approximately 128,000 Class members opted out of this case," said Mark Rifkin, one of the lawyers for the Class. Rifkin is with the Greenfield & Rifkin, LLP law firm in Pennsylvania. Benefits available to individual class members with misrepresentation claims include substantial cash awards of several thousand dollars per policy, premium credits, and subsidized premium loans, all of which may be awarded for a variety of misrepresentations including when an agent wrote or said that a policyholder would never have to pay more than a fixed number of premiums and that thereafter such premiums would "vanish," where that proves not to be true; and instances when a policyholder received a misleading written illustration from an agent regarding the performance of a life insurance policy which may have been based upon assumptions not applicable to that policyholder. All policyholders with any type of misrepresentation claim against CGLIC, should file a Claim Form at once.
The benefits provided to the Class under this settlement also include $35 million in future adjustments CGLIC will make to a group of policies which were impacted by adjustments the Company made to recover the cost of the "DAC Tax." Class members who are eligible to receive that benefit need not take any action. However, anyone who may have a misrepresentation claim must act quickly. Misrepresentation Claim Forms must be postmarked no later than July 12, 1997.
Upon receipt of any misrepresentation Claim Form and supporting materials (such as any CGLIC illustration, letter, policy, or other document which shows the class member was misrepresented by the Company or its agents), an initial assessment and award will be made on the claim based upon a pre-set scoring system. A simple, no cost alternative dispute resolution system has been set up to allow class members who are dissatisfied with any initial award to resolve their claims. "The process for submitting a claim and receiving an award is very straight forward," said Earle Kyle, another one of the lawyers for the Class. Kyle is with the Lockridge Grindal Nauen & Holstein P.L.L.P. law firm in Minneapolis. "Class members should send in their Claim Forms while the Company still has its checkbook open," said Kyle. According to Rifkin, under the ADR process, there is literally no limit on the amount of benefits that may be paid to the class members. "The payout by Connecticut General could be several tens of millions," he said.
Anyone who believes they are a member of the class and has questions concerning the settlement, or has not received a copy of the settlement notice or a Claim Form, or who needs assistance completing a Claim Form may write plaintiff’s attorneys at CGLIC Class Action, P.O. Box 3190, Fullerton, California 92834, or may call 1- (800) 607-5556. Those with multiple policies must submit a Claim Form for each policy they want to be considered for a misrepresentation claim award.
PRESS RELEASE CONTACTS:
MARK C. RIFKIN, ESQ.
GREENFIELD & RIFKIN LLP
800 TIMES BUILDING
ARDMORE, PA 19003
FAX: (610) 642-6017
EARLE F. KYLE, IV, ESQ.
LOCKRIDGE GRINDAL NAUEN & HOLSTEIN P.L.L.P.
100 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MN 55401
FAX: (612) 339-0981