What You Need to Know
- Skellig ICAV of Dublin runs a fund that owns a Performance UL policy with a $15 million death benefit.
- The fund says John Hancock increased cost-of-insurance rates for that policy and 1,500 others in 2018 without giving a clear explanation.
- The plaintiff contends that mortality and lapse trends did justify the COI increase.
The lead plaintiff, Skellig ICAV, joined with its U.S. securities intermediary, Wilmington Trust, to file a complaint against John Hancock last week, in the U.S. District Court for the Southern District of New York.
John Hancock declined to comment on the case.
What It Means
The outcome of the case could affect any clients who are using cash-value life insurance to protect their families against premature death, as well as any clients who are using cash-value life insurance in retirement income planning, education planning or estate planning arrangements.
The case could also affect the prices clients could get if they chose to sell unwanted life insurance policies to life settlement companies by affecting life settlement companies’ COI spending and overall operating costs.
Skellig is a Dublin-based company that runs an Irish collective asset-management vehicle, or ICAV. A Skellig ICAV fund — Gannet Life Settlement Fund I — owns a Performance UL policy issued by John Hancock Life of New York in 2008 with a $15 million death benefit.
John Hancock Life of New York is a subsidiary of Manulife Financial of Toronto.
Life settlement companies, ordinary universal policyholders and insurers have fought many battles in court over the past decade.
John Hancock Life of New York and an affiliate, John Hancock Life Insurance Company (USA), resolved a Performance UL COI class action in May by agreeing to pay a $123 million settlement.