Brewer, Attorneys & Counselors, filed a lawsuit on July 19, 2018, against Transamerica Life Insurance Company (“Transamerica”) accusing it of improperly implementing a plan to increase premiums by 168 percent on a multimillion-dollar universal life insurance policy purchased nearly two decades ago. The suit was filed in the United States District Court for the Central District of California on behalf of Michael K. Hamra, trustee of the Sam F. Hamra, Jr. and June S. Hamra Irrevocable Trust (“the Trust”).
The lawsuit involves a “TransSurvivor” policy purchased by the Trust from Transamerica in 1999 on the lives of Sam and June Hamra. The policy includes a death benefit of $5,000,000. Over the years, the Trust paid, and continues to pay, millions of dollars in premiums for the policy. However, in a notice sent by Transamerica to the Trust and all other TransSurvivor policyholders in April 2018, Transamerica announced that it would implement a 39 percent monthly deduction rate (“MDR”) increase on the policy in each of the next three policy anniversary dates – on a compound basis. The increase translates to an extraordinary total increase of 168 percent, plaintiffs allege.
According to the complaint, Transamerica did not offer any contractual justification for the increase. The complaint alleges that Transamerica’s conduct violates the express language of the policy and the implied covenants of good faith and fair dealing, as well as California’s Unfair Competition Law.
“Sadly, Transamerica’s anti-consumer conduct continues unabated,” the complaint states. “Plaintiff’s insureds are now in their eighties and, due to age-related underwriting considerations, life insurance protection from other sources is either unavailable or prohibitively expensive. Therefore, Transamerica’s actions strip Plaintiff of any life insurance protection unless [the Trust] accedes to Transamerica’s improper demands.”
Hamra Trust Sues Transamerica, Alleges Improper Universal Life Insurance Premium Increases
