John Hancock and Talcott Re Face Lawsuits Tied to 2017 Tax Cuts

The New Suits

Susman Godfrey lawyers have filed both of the new COI suits in the U.S. District Court for the Southern District of New York.

One is Zaben and Weinstock Partners vs. John Hancock Life Insurance Company of New York and John Hancock Life Insurance Company (U.S.A.).

The other is Arbuckle Funding vs. Talcott Resolution Life and Annuity Insurance Company.

In the Hancock suit, the plaintiffs are seeking court permission to represent a class of policyholders who have been forced to pay excessive COI charges.

In the Talcott Re suit, Arbuckle is seeking to represent one class of policyholders who have been forced to pay excessive COI charges and a class of policyholders who have been forced to pay excessive premium tax charges.

Life insurers have historically argued that COI calculations are more complicated than policy owner plaintiffs think.

The plaintiffs allege in the new suits that the TCJA corporate income tax should have led to an 18% reduction in the COI charges. Instead, the plaintiffs say, Hancock and Talcott Re have continued to increase policies’ COI charges.

“It is apparent that John Hancock wrongly construes its policies as granting it a nonsensical ‘heads I win, tails you lose’ power, reserving the right to increase COI rates in response to increasing tax liability, but not requiring it to decrease COI rates in the face of an unambiguous and far more dramatic reduction in tax liability that resulted from the TCJA,” the plaintiffs argue in the suit against Hancock.

Credit: PIC SNIPE/Shutterstock