John Hancock faces insurance pricing head on in court filing
John Hancock, in a court filing, posted this summer, agreed to pay just over $91 million to plaintiffs who participated in a lawsuit alleging the carrier had forced them to pay “unlawful and excessive” cost of insurance expenses in universal life policies. This suit alleged John Hancock should have claimed responsibility for lowering rates in its policies since mortality rates “declined significantly over the past several decades” and expectations of future mortality experience “likewise substantially changed in its favor.”
It was noted that John Hancock had repeatedly stated in regulatory filings over the past 15 years that “mortality experiences were substantially better than it expected.” Yet even though the mortality experience was much improved over expectations, “John Hancock has not lowered the COI rates it charges its customers,” despite “contractually promising” to review COI rates “at least once every 5 policy years.”
The settlement provides the members of the class action lawsuit with a $91.25 million cash payment.