Kantor & Kantor asks to file a class action against Primerica Life Insurance Company for its failure to provide insureds with the right to designate a third party to receive notice of lapse
Are there ways to prevent a life insurance policy from lapsing? Sometimes the answer is yes. However, often it requires particular knowledge of the law.
On August 13, 2021, Kantor & Kantor filed a motion asking the Federal District Court for the Central District of California to allow the amendment of a complaint to bring class action allegations against Primerica Life Insurance Company. The class action asserts that Primerica has a business practice of failing to provide California insureds with their statutory right to designate a third party to receive notice that a life insurance policy will lapse.
The ability to name a third party to receive notice of lapse is a precious right. Many people forget to pay or cannot pay life insurance premiums when stricken by illness or tragedy—situations often occurring shortly before they die. If a third party receives a letter from the insurance company about the potential loss of life insurance coverage, that allows another person to step in and prevent the policy from lapsing at a critical time.
California Insurance Code Section 10113.72 requires that every year life insurance companies, like Primerica, give insureds the right to list additional people to receive a letter if a life insurance policy is going to lapse. Under California law, if the life insurance company did not provide this annual right, the policy cannot lapse.
In May 2021, Kantor and Kantor received documents from Primerica in a lawsuit alleging Primerica’s failure to comply with California Insurance Code Section 10113.72. After reviewing the documents, Kantor & Kantor discovered that Primerica had likely made the third-party notice information available to its insured electronically via an internet portal.
If that was true, Primerica did so in a highly deceptive way. It sent the insured an email with the subject: “Your Annual Privacy Notice is Now Available.” The body of the email only identified the “Annual Privacy Notice” being available. Nothing in the email mentioned anything related to the third-party notice.
This email from Primerica indicated that the Annual Privacy Notice was available via an online portal. The documents suggest Primerica may have buried the critical third-party notice documents in this portal but without notifying the insured about them. How would anyone know about their valuable rights if this was how Primerica communicated with them?
Based on Primerica’s production, Kantor & Kantor learned this confusing email might be how Primerica communicated with many of its insureds about their statutory right to third-party notice. Kantor & Kantor’s clients seek to amend their Complaint to bring their allegations as a class action.
The clients are applying the same allegations (failure to comply with California Insurance Code Section 10113.72) to a potential class of insureds harmed in the same way. This is the purpose of class-action litigation – to resolve legal issues that apply to a group of harmed individuals in one case, allowing the court system to conserve resources by avoiding multiple lawsuits on identical legal issues and ensuring uniformity in legal decisions across a group of similarly situated individuals. As alleged in the proposed First Amended Complaint (para 47):
Treatment of this dispute as a class action is a superior method for the fair and efficient adjudication of this matter over individual actions. Class treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of evidence, effort, or expense that numerous individual actions would require. In addition, class treatment will avoid the risk of inconsistency and varying adjudications.
After reviewing documents produced by Primerica, Kantor & Kantor recognized that the content of the notices sent to their client and their manner of delivery may be a part of Primerica’s business practice. This practice impacted many more of Primerica’s insureds. On behalf of the client, Kantor & Kantor seeks justice for other insureds and beneficiaries whose policies lapsed after Primerica’s alleged failure to comply with Cal. Ins. Code § 10113.72.
