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Symetra Life Insurance agreed to a proposed $32.5 mn settlement in a class-action lawsuit

Symetra Life Insurance agreed to a proposed $32.5 mn settlement in a class-action lawsuit

Symetra Life Insurance Co. agreed to a proposed $32.5 mn settlement in a class-action lawsuit alleging it withdrew excessive amounts from policyholders’ cash value trusts and made unauthorized deductions beyond policy terms, according to BestWire.

The settlement is awaiting court approval, and the proposed agreement indicates approval is likely.

Filed in 2021 in the U.S. District Court for the Western District of Washington, the lawsuit claims these deductions restricted plaintiffs’ ability to invest through their policies, pay future premiums, increase death benefits, withdraw cash, and use policies as loan collateral.

The initial complaint states that while policies authorize Symetra to set cost of insurance rates based solely on “expectations as to future mortality experience,” the company also used unauthorized factors such as expense experience.

By incorporating these nonapproved factors, Symetra knowingly charged higher rates than permitted, the lawsuit claims.

The policies involved were originally issued by American States Life Insurance Co. in Arizona, California, Florida, Illinois, Indiana, Kentucky, Minnesota, Missouri, South Carolina, Texas, and Washington after Jan. 1, 2000.

A Symetra spokesperson said the company is pleased to reach a mutually beneficial settlement, avoiding prolonged litigation and allowing it to focus on serving clients. The settlement does not admit wrongdoing, the company added.