State Farm Life Insurance Company agreed to a $325 million settlement in 2023 to resolve a class-action lawsuit alleging improper deductions and non-disclosure of fees from universal life insurance policies. This case highlights concerns about insurance company fee practices and serves as a reminder for consumers to scrutinize their policies and fees.
Detailed Breakdown:
- Lawsuit: Filed in 2019, accusing State Farm of violating policy terms by deducting unauthorized, excessive, and undisclosed fees from universal life policy account values.
- Settlement: Approved by a federal judge in 2023, providing $325 million to eligible policyholders and requiring State Farm to change its fee deduction practices.
- Impact:
- Victory for plaintiffs: Recovers overcharged fees and sets a precedent for fair treatment and fee transparency in the insurance industry.
- Warning to other insurers: Emphasizes the importance of adhering to policy terms and clear fee disclosure.
- Reminder for consumers: To carefully review policies, understand fees, and seek legal counsel if needed.
- Wider context: This lawsuit is part of a growing trend of lawsuits against insurance companies concerning complex fee structures and potential overcharging
| Complete Date | Case | Citation | Court | Short Summary |
|---|---|---|---|---|
| 2019 | State Farm Universal Life Fee Lawsuit | N/A | U.S. District Court (Specific District Unknown) | Alleged unauthorized, excessive, and undisclosed fee deductions from universal life policies. |
| 2023 | State Farm Universal Life Fee Settlement | N/A | U.S. District Court (Specific District Unknown) | $325 million settlement approved, requiring State Farm to change fee practices and compensate policyholders. |
