Nassau Financial Sues Its Insurers for Help Paying Its Legal Bills

Nassau Financial, the parent of life insurance and annuity issuers, has sued its own insurers for help with paying bills related to lawsuits involving universal life insurance policies.

James Kenney, the owner of a universal life policy written by PHL Variable Insurance, is seeking permission from the U.S. District Court in Connecticut to represent a class of PHL policyholders affected by cost-of-insurance charge increases.

PHL was acquired by Nassau Financial in 2016 and recently entered rehabilitation in Connecticut.

“In defending the Kenney Action, Plaintiffs have incurred, and will continue to incur, substantial ‘Defense Expenses,’” PHL says in the complaint. “Plaintiffs also confront the potential of having to fund a settlement or satisfy an adverse judgment.”

Nassau says that it’s currently the named insurer for $10 million in directors and officers coverage and $5 million in errors and omissions coverage written by XL Specialty Insurance Co.

XL Specialty, which is now part of AXA, and several excess insurers have refused to pay benefits in connection with the universal life litigation, Nassau says in a complaint filed last week in the U.S. District Court for the Northern District of California.