Lincoln COI Class Actions
On March 20, four cases in the Eastern District of Pennsylvania were consolidated into a single consolidated class action (Case 2:17-cv-00837). Interim Class Counsel has 30 days from March 20 to file a Consolidated Class Action Complaint. The four cases that were consolidated were:
- Bharti R. Bharwani, et al. v. Lincoln National Corp. and Lincoln National Life Insurance Company (Case 16-cv-06605);
- Barry Mukamal, et al. v. Lincoln National Corp. and Lincoln National Life Insurance Company (Case 17-cv-00234);
- US Life 1 Renditefonds GMBH & Co. KG, et al. v. Lincoln National Life Insurance Company (Case 17-cv-00307); and
- Lowell Rauch, et al. v. Lincoln National Corp. and Lincoln National Life Insurance Company (Case 17-cv-00837).
On March 13, a separate class action was filed in the Eastern District of Pennsylvania: Agel v. Lincoln (Case 2:17-cv-01094). This case was not consolidated with the four mentioned above, possibly because it was filed after the motion to consolidate the other four.
Interestingly, some of these complaints include allegations that Lincoln breached the insurance contracts by raising the COI rates drastically rather than by making regular, incremental adjustments (if, in fact, Lincoln’s expectations of such factors as interest and expenses were changing over the past 10 years).
FDIC Vice Chairman Hoenig on a Market-Based Proposal for Regulatory Relief and Accountability
On March 13, FDIC Vice Chairman Thomas M. Hoenig gave a speech introducing a proposal that would require financial institutions to partition nontraditional bank activities into separately managed and capitalized affiliates.
The stated purpose is “to ensure that the public safety net is not expanded beyond the traditional banking activities that it was originally designed to support and to restore open market competition within the financial services industry.”
The proposal would require that traditional banking activities generally found in an insured depository institution, and nontraditional banking activities such as investment banking, be structured under separately capitalized intermediate holding companies of a financial holding company. Each intermediate holding company that houses nontraditional banking activities would become a separate affiliate, separately capitalized, separately managed from the insured bank, and structured such that it could withstand bankruptcy.
NAIC Working Group Suspends Work on Unclaimed Life Insurance and Annuities Model Act
On March 7, the NAIC working group voted to suspend its work on a model law aimed to address issues with unclaimed death benefits. The working group had reached an impasse regarding whether or not the model act would apply prospectively or retroactively. The Life Insurance and Annuities (A) Committee will get a report from the working group at the NAIC’s Spring National Meeting.