Standard Life, Protective Life Designation Notice Requirements California Class Action

People who are elderly or sick may have difficulty keeping up with bills and other necessities for a stable life, and may need help from a third party. The complaint for this class action alleges that Standard Life Insurance Company and Protective Life Insurance Company do not provide the annual notices required under California law to allow insureds to designate a third party to receive certain notices.

Insurance policies are cheaper if they are purchased when the insured is young and healthy. If they lapse, the person may be required to go through the underwriting process again, including having a physical exam. If the person’s health has declined over the years, or if they are years older, the new premium is likely to be more expensive than the old one; it may even be unaffordable.

The complaint deals with two requirements under the California Insurance Code: First, it says, insurers must send a yearly notice allowing policyholders to appoint a third party to receive notice that their policies may be terminated because a premium has not been paid. Second, it says, they must provide notice to a designee that a premium has not been paid before they can terminate a policy.

The purpose of these requirements, the complaint claims, is to protect consumers from losing insurance coverage due to a poor choice about their options or a missed premium payment.

In this case, plaintiff Janice Schmidt brings suit against Standard Life and Protective Life for the improper termination of the policy of her husband, Arthur James Schmidt. According to the complaint, the policy was issued by Standard Life in 1987 and, from 2001, serviced by Protective Life. The complaint alleges, “Protective Life purportedly attempted to lapse the Policy for nonpayment of premium on or around April 20, 2014.

The complaint alleges that, while the companies did send the required notices to those whose policies were issued in later years, it did not send them to those like Mr. Schmidt, whose policies were issued in earlier years. Mr. Schmidt died on January 30, 2018, and the companies refused to pay Ms. Schmidt the benefits of his policy.

The complaint alleges that Standard Life and Protective Life have not fulfilled the Designation Notice Requirements, “which means that the policies could not have [lapsed] and did not lapse,” so that the companies are refusing to honor their policies in refusing to make payouts to beneficiaries.

The class for this action is all beneficiaries who made a claim, or would have been eligible to make a claim, for benefits under life insurance policies issued in California that were in force on or after January 1, 2013 or were renewed on or after January 1, 2013, and which were lapsed or were terminated by the defendants in this case for premium nonpayment after January 1, 2013, where the defendants did not meet the Designation Notice Requirement before the lapse or termination.

Article Type: Lawsuit
Topic: Insurance
Tags: Denial of Benefits, Improper or Unlawful Termination or Cancellation Policy, Insurance, Life Insurance