A life settlement provider says a life insurer has used illegal methods to interfere with its ability to buy a convertible term life policy.
Coventry First L.L.C., Fort Washington, Pa., has filed a suit against John Hancock Life Insurance Company (USA), Boston, a unit of Manulife Financial Corp., Toronto (TSX:MFC), in the U.S. District Court in Los Angeles.
In the complaint, Coventry has accused John Hancock of tortious interference with a contract, negligent interference with a contract, violation of the California Business and Professions Code, and violation of the California Life Settlement Act.
The team of lawyers representing Coventry includes Nat Shapo, a former Illinois insurance director.
John Hancock has declined to comment on the suit.
“It is company policy not to comment on specific policyholder matters or matters in litigation,” a John Hancock representative says.
In June 2004, an insurance trust bought a $1 million term life policy insuring the life of a 62-year-old resident of suburban Los Angeles from the company now known as John Hancock. The policy included a provision that let the insured convert the policy into a universal life policy without providing proof of insurability, Coventry First says in its complaint.
In August 2010, the trust entered into a contract to convert the policy and sell the converted policy to Coventry First for $45,000, Coventry First says.