Beasley Allen lawyer W. Daniel “Dee” Miles, III, head of the firm’s Consumer Fraud section, was appointed co-lead counsel in class action litigation involving Banner Life Insurance Company, together with attorney George W. Walker, III. The case is filed in federal court in the District of Maryland. The Hon. Richard D. Bennett, United States District Judge, who is overseeing the litigation, also granted the Plaintiffs’ discovery order.
The lawsuit alleges Banner Life Insurance Company is implementing unfounded cost of insurance increases. The complaint alleges Banner implemented this scheme ultimately to benefit shareholders and rid Banner of near-term liabilities it has accrued due to its wrongful use of captive reinsurance companies.
“This is a very important case and we are honored to have been named co-lead counsel,” Miles said. “We look forward to getting the discovery and moving this case toward class certification.”
The scheme involved Banner Life and its parent corporations, Legal and General America, Inc. (LGA) and Legal and General Group PLC (L&G), and misdirected funds set aside to pay policyholders’ death claims into wholly owned captive reinsurance companies. This created a false surplus on the balance sheet and allowed L&G to pay stockholders more than $800 million in dividends.
In 2015, in order to find new cash with which to fund future dividends, and delay the inevitable financial disaster that could occur because of its near-term liabilities, Banner Life sent a letter to policyholders informing them that dramatic cost of insurance increases would be necessary. They justified the increase by saying the company “did not adequately account for future experience,” i.e. the number and timing of death claims, how long people would keep their policies, how well the company’s investments would perform, and the cost to administer policies.
As a result of its fraudulent activities, Banner Life policies did not perform adequately or build cash value, but were instead being eroded. Eventually, policyholders were forced to forfeit their policies or allow their cash value to be taken in order to offset damages. Banner Life in effect raided the policies of the accumulated investor savings.
Banner Life investors and Class Members are seeing relief under breach of contract, unjust enrichment, conversion and fraud theories.
Lawyers at Beasley Allen also are filing complaints against other companies alleging similar wrongful activity. If you have seen this practice by any life insurance company, there may be a claim that our firm would be willing to investigate. You can contact Andrew Brashier or Rachel Boyd, lawyers in our Consumer Fraud and Commercial Litigation Section, at Andrew.Brashier@beasleyallen.com or Rachel.Boyd@beasleyallen.com, or call us at 800-898-2034 to discuss further.