Trusts Sue Insurer Over Settlements

Kroll says PHC set up a subsidiary, Phoenix Life Solutions, to buy life insurance policies for an immediate cash settlement. Meanwhile, PHL and Phoenix issued policies that gave them or Phoenix Life Solutions the right of first refusal to purchase the policies when a third-party offered money for a policy transfer, the lawsuit alleges.

But when policyholders actually obtained money offers, the companies neither matched the offers nor acknowledged their validity or allowed the policy transfer, according to the press release.

Instead, PHL and its life insurance units allegedly seek to rescind their PHL life insurance policies and to confiscate the premiums when policy owners try to transfer or assign the policies to unrelated parties, the suit alleges.

In a statement, the Phoenix Companies said that “the allegations noted in that press release are without merit. Further, we wish to clarify that the $260 million figure noted in that press release does not represent Phoenix’s alleged litigation exposure, but is simply the combined face amount of the policies mentioned.”