A proposed settlement has been reached in a class action lawsuit called Hanks v. Voya Retirement Insurance and Annuity Co., Case No. 16-cv-6399 (S.D.N.Y.) (the “Settlement”).
What is this lawsuit about?
In the class action lawsuit, the Plaintiff alleges that Defendant Voya Retirement Insurance and Annuity Company (“Voya”), formerly Aetna Life Insurance and Annuity Company (“Aetna”), breached its contracts with certain policy owners. In May 2016, policyholders were issued letters announcing that their insurance policies would be subject to cost of insurance (“COI”) rate increases, and Plaintiff asserts those COI rate increases violated the terms of the policyholders’ contracts, and that Plaintiff and members of the Class have been damaged, as a result. Voya denies Plaintiff’s claims and asserts multiple defenses, including that Voya’s challenged actions are lawful, justified, and have not harmed Plaintiff or caused any damages.
Voya and the Lincoln Life & Annuity Company of New York ("Lincoln"), Voya’s administrative agent and reinsurer, deny any and all liability or wrongdoing of any sort with regard to the 2016 COI rate increase. Instead, the parties, with the assistance of an experienced mediator, Robert Meyer, Esq. of JAMS, have agreed to the Settlement. The parties want to avoid the risks, costs, and delays of further litigation. The Court has not decided in favor of the Plaintiff or Defendant. Plaintiff and Class Counsel think the Settlement is in the best interests of the Settlement Class and is fair, reasonable, and adequate.
Who is included?
The Settlement Class consists of all owners of universal life (including variable universal life) insurance policies issued by Aetna, now known as Voya, that were subject to the COI increase announced in 2016, except as described in FAQ 8.
What does the Settlement provide?
A Settlement Fund of $92.5 million will be established for Settlement Class members. The Settlement Fund will be reduced proportionally if there are any opt-outs from the Settlement Class. After payment of the cost to administer the Settlement Fund as well as attorneys’ fees and expenses and the payments to the Class Representative (see FAQ 18), the Settlement Administrator will distribute the remaining amounts to Settlement Class members in proportion to their share of the overall COI overcharges collected from the Settlement Class through May 2021. No portion of the Settlement Fund will be returned to Voya or Lincoln.
Voya and Lincoln have also agreed not to:
- Raise COI rates on policies covered by the Settlement for a period of five years, unless ordered to do so by a state regulatory body.
- Cancel, void, rescind, or deny a death claim submitted under the Settlement Class members’ policies or contest the validity of a policy based on:
- An alleged lack of valid insurable interest under any applicable law or equitable principles; or
- Any misrepresentation allegedly made on or related to the application for, or otherwise made in applying for the policy.
More details are in the Settlement Agreement.
The Court in charge of this case still has to decide whether to approve the Settlement. Payments will be made if the Court approves the Settlement and after any appeals are resolved. Please be patient.