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October 19, 2023 at 03:18 PM
A life insurer is suing its own insurers over coverage for lawsuit defense costs.
PHL Variable Insurance, a subsidiary of Nassau Financial Group, filed the complaint in a state court in California earlier this week.
PHL contends that XL Specialty Insurance, its primary insurer, or its providers of excess insurance coverage should cover the expenses it faced when it responded to two lawsuits over life insurance premium increases. AXA acquired XL Group in 2018, and XL Specialty is now a subsidiary of AXA.
Nassau Financial and PHL could not immediately be reached for comment. AXA said it could not comment on pending litigation.
The COI increases: PHL wrote many universal life policies, or policies designed to split the effects of the investment performance of the assets the policyholder is feeding into the policy for savings purposes from the effects of “cost of insurance” expenses.
The list of COI expenses includes the cost of administering policies and the cost of paying death benefits.
PHL says its policies included provision notifying policyholders that it could review COI rates regularly to see if they should be changed.
