Life insurance firm Transamerica has agreed to resolve class action litigation it was facing over monthly deduction rate adjustments on certain universal life insurance policies.
The settlement for around $88m (£71.5m, €80.9m) “removes the uncertainty of this ongoing litigation for the company and its customers”, Transamerica’s parent company Aegon said in a statement.
The universal life insurance policies in question permit Transamerica to adjust monthly deduction rates up to a contractually guaranteed maximum, subject to certain conditions.
The claimants in the case “challenged” increases to monthly deduction rates that were enacted in 2017 and 2018 on approximately 8,000 universal life policies.
Separate
Aegon said: “Transamerica implemented these adjustments, necessitated by low long-term interest rates, changes in expectations as to future mortality experience, and other factors, and in accordance with the policies’ contractual terms.
“The monthly deduction rate increases enacted in 2017 and 2018 are separate and distinct from the monthly deduction rate increases involved in a prior class action settlement announced by Aegon in October 2018.”
In October 2018, the US Securities and Exchange Commission (SEC) ordered four businesses owned by Dutch insurer Aegon to refund $97.6m to misled retail investors.
According to the SEC, investors put billions of dollars into mutual funds and strategies using faulty models developed by investment adviser Aegon USA Investment Management (AUIM), which is one of four entities under Transamerica.
