Regulators, ACLI Mindful Of Modal Premium Cases
Lawsuits regarding modal premiums–or paying premiums in installments rather than at one time, and usually at a higher rate–are impinging on the ability of state insurance commissioners to oversee insurance regulation, leaving decision-making to juries, according to one regulator.
Speaking at a recent legal seminar, Larry Mirel, District of Columbia commissioner of insurance and securities, said the complaints cited failure to provide an annual percentage rate for these fees as an unfair trade practice.
Among the cases Mirel cited was a suit against Massachusetts Mutual Life Insurance Company, Springfield, Mass., for approximately $10 million. An original proposed settlement that would have gone largely to plaintiffs attorneys, was withdrawn, he said, and now plaintiffs will receive $50 off the purchase of their next MassMutual policy.
The American Council of Life Insurers, Washington, is tracking 17 such class-action suits, 16 of which are in New Mexico, says Carl Wilkerson, ACLI chief counsel of securities and litigation.