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Prudential Long-Term Care Insurance Rate Increases ERISA Class Action

The defendants in this class action include the Prudential Insurance Company of America, which issued group long-term care insurance plans, and the sponsors of the plans, including Tufts University, in certain states. The problem? According to the complaint, the participants in the plans were told that their premiums could only be raised with the approval of their state’s Commissioner of Insurance. However, in certain states, such as Massachusetts (where Tufts is located), the Commissioner of Insurance does not have approval authority over group long-term care insurance rates.

The class for this action is all former or current holders of certificates of Prudential group long-term care insurance who (1) were issued coverage under a group long-term care policy which represents that their premiums will rise only with the approval of their home state’s insurance regulator, and (2) who were issued their certificate of coverage in a state where group long-term care insurance rates were unregulated at the time Prudential raised their premium rate.

Long-term care insurance is meant to cover help with the activities of daily life in old age, which is generally not provided by Medicare or other health insurance. Those who buy it are looking for financial security, the complaint says, so that promises about premium increases are crucial.

This class action concerns group employee benefit plans that are governed by the Employee Retirement Income Security Act (ERISA), with insurance issued by Prudential, that represent that their premium rates can only be raised “subject to the approval of the [state of issuance] Commissioner of Insurance.”

Prudential did not honor this promise in the case of certain plans, the complaint alleges, because it raised rates in unregulated states without any such approval. The plaintiff in this case, Barbara M. Parmenter, was one of the participants in the Tufts University plan whose rates were raised by Prudential.

“On January 21, 2019,” the complaint alleges, “Prudential mailed a letter to Plaintiff notifying her that the group long[-]term care coverage she owned would be subject to a 40% rate increase effective May 1, 2019.” That increase had not been approved by the Massachusetts Insurance Commissioner.

Another unapproved rise was announced in 2020. At that time, the complaint alleges, Parmenter “exercised the non-forfeiture feature of her policy in order to avoid paying future premiums in exchange for a greatly reduced maximum benefit under her policy. She only exercised this option because of the continued illegal rate increases Prudential demanded from her to keep the policy in force.”

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Prudential Long-Term Care Insurance Rate Increases ERISA Complaint

January 20, 2022

The defendants in this class action include the Prudential Insurance Company of America, which issued group long-term care insurance plans, and the sponsors of the plans, including Tufts University, in certain states. The problem? According to the complaint, the participants in the plans were told that their premiums could only be raised with the approval of their state’s Commissioner of Insurance. However, in certain states, such as Massachusetts (where Tufts is located), the Commissioner of Insurance does not have approval authority over group long-term care insurance rates.

Prudential Long-Term Care Insurance Rate Increases ERISA Complaint

Case Event History

Prudential Long-Term Care Insurance Rate Increases ERISA Complaint

January 20, 2022

The defendants in this class action include the Prudential Insurance Company of America, which issued group long-term care insurance plans, and the sponsors of the plans, including Tufts University, in certain states. The problem? According to the complaint, the participants in the plans were told that their premiums could only be raised with the approval of their state’s Commissioner of Insurance. However, in certain states, such as Massachusetts (where Tufts is located), the Commissioner of Insurance does not have approval authority over group long-term care insurance rates.

Prudential Long-Term Care Insurance Rate Increases ERISA Complaint
Tags: Insurance, Long Term Care Insurance, Premium Increases, Unfair or Improper Increase in Premiums