Genworth Long-Term Care Insurance Omissions on Rate Increases Class Action

Long-term care (LTC) insurance is expensive. When choosing which plan to buy, consumers must choose a policy that will be affordable over many years, until the time it is needed. This class action centers on price rises for LTC policies from Genworth Life Insurance Company and Genworth Life Insurance Company of New York. It does not contend that Genworth should not raise prices on policies, but that disclosures made to customers were inadequate.

The policies in question are “product blocks” the company calls PCS I (issued between 1994 and 1997) and PSC II (issued between 1997 and 2001).

When these policies were being sold, the complaint alleges, Genworth’s sales agents pointed out that the company had not been raising the rates on its LTC insurance. This, the complaint says, led would-be customers to believe that future rises would be minimal.

By 2012, however, the complaint alleges, Genworth was having problems, including “a substantial shortfall in its LTC reserves, much larger than it ever anticipated.” The problem was increasing, but the company continued to pay dividends to its holding company.

Genworth devised a Multi-Year Rate Increase Action Plan (MYRAP) designed to right its finances. But because this would not have an immediate effect, Genworth began making its calculations with “significant anticipated (but not yet filed) future premium rate increases…”

The complaint claims that Genworth “was so confident in its ability to achieve these rate increases that it relied on them in its then-current financial reporting and when paying executive compensation bonuses that were tied to successful execution of these plans.”

However, policy holders were not told of the “massive” rate increases that were coming. Still, the hole that had to be plugged by the rate increases became larger. The complaint says, “By the end of 2019, that number had grown to $7.6 billion.”

When it instituted its first, smaller rate increases, it only told customers only that it was “likely” or “possible” that their rates would increase again in coming years. Had customers known that the planned rate increases might double or triple their costs, the complaint claims, they might have made different decisions, such as deciding to drop the policies and buy from another insurance company. The earlier they did this, the lower their rates with the new company would likely be. However, Genworth did not provide them with enough information to make an informed decision.

The counts include fraudulent inducement by omission, among other things. The complaint notes that this case is very similar to another filed in 2019, but this one is field “on behalf of policyholders that were not included in the prior lawsuit.”

Two classes have been defined for this action:

  • The PCS I Class is all persons living in the US who have Genworth PCS I LTC policies.
  • The PCS II Class is all persons living in the US who have Genworth PCS II LTC policies.
Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Genworth Long-Term Care Insurance Omissions on Rate Increases Complaint

January 11, 2021

Long-term care (LTC) insurance is expensive. When choosing which plan to buy, consumers must choose a policy that will be affordable over many years, until the time it is needed. This class action centers on price rises for LTC policies from Genworth Life Insurance Company and Genworth Life Insurance Company of New York. It does not contend that Genworth should not raise prices on policies, but that disclosures made to customers were inadequate.

Genworth Long-Term Care Insurance Omissions on Rate Increases Complaint

Case Event History

Genworth Long-Term Care Insurance Omissions on Rate Increases Complaint

January 11, 2021

Long-term care (LTC) insurance is expensive. When choosing which plan to buy, consumers must choose a policy that will be affordable over many years, until the time it is needed. This class action centers on price rises for LTC policies from Genworth Life Insurance Company and Genworth Life Insurance Company of New York. It does not contend that Genworth should not raise prices on policies, but that disclosures made to customers were inadequate.

Genworth Long-Term Care Insurance Omissions on Rate Increases Complaint
Tags: Did Not Make/Receive Proper Disclosures, Insurance, Long Term Care Insurance, Premium Increases