A federal appeals court has decided that, under federal securities laws, a children’s term life rider should be reviewed separately from the primary insured’s variable life policy.
A 3-judge panel of the 2nd Circuit Court of Appeals has ruled unanimously in Ring et al. vs. AXA Financial Inc. and Equitable Life Assurance Society of the United States that a district court should distinguish between the children’s term life rider and the underlying variable life policy when applying the Securities Litigation Uniform Standards Act of 1998.
Joshua Rose, a Washington lawyer who represents Shirley Ring, the lead plaintiff, and other plaintiffs in the case, has argued that Equitable, a unit of AXA Financial Inc., New York, violated the New York state consumer protection law by continuing to bill parents for children’s term life riders after the children reached age 25 and no longer qualified for rider coverage.
SLUSA preempts state-law securities claims.
Lawyers for Equitable had asked the courts to dismiss the Ring suit state-law claims, arguing that the variable life policies and children’s term riders in question should be considered together as securities covered by SLUSA, Circuit Judge Rosemary Pooler writes in the decision for the 2nd Circuit.