NASCAR driver Kyle Busch and his wife settled their $8.5 mn lawsuit against Pacific Life Insurance and Arizona agent Rodney Smith, closing a dispute over indexed universal life projections.
A notice filed in U.S. District Court for the Western District of North Carolina states the parties are finalizing settlement documents and plan to submit dismissal papers within 30 days, each side covering its own fees and costs.
The filing does not disclose financial terms, according to Insurance Journal.
In an amended complaint submitted in January, Busch alleged Pacific Life and Smith promoted an indexed universal life strategy built on misleading projections, unrealistic assumptions and material omissions. The couple claimed the structure exposed them to substantial financial risk.
According to the complaint, Smith advised in 2017 the policies would become self-sustaining after a limited run of annual premium payments and later generate significant tax-free retirement income.
Busch questioned the arrangement after receiving a sixth premium notice. He contended he had been told funding would require only five years of premiums.
Smith and his firm, Red River, denied most allegations. Pacific Life moved to dismiss, arguing the complaint failed to establish a valid legal claim.
The insurer stated the Buschs signed multiple disclosures acknowledging policy mechanics, including documentation reflecting planned premium payments over more than 30 years, through age 70 and beyond.
Pacific Life also asserted Busch did not fully fund the contracts, allowed some to lapse and surrendered others.
Indexed universal life products tie crediting rates to equity benchmarks subject to caps and floors.
According to Beinsure analysts, disputes often center on illustration assumptions and policyholder expectations regarding premium duration and cash value performance.
Courts typically examine disclosure language, funding patterns and whether projections were presented as guarantees or scenarios.
The settlement ends the litigation without a judicial ruling on the merits.
