Class Action Claims First Penn-Pacific Life Insurance Co. Rates ‘Unlawful and Excessive’

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A proposed class action has been filed in Pennsylvania against First Penn-Pacific Life Insurance Company in which the plaintiff seeks to represent policyholders who’ve allegedly been forced to pay “unlawful and excessive” monthly premiums. The plaintiff claims members of the proposed class have been forced to pay inflated costs “not allowed by the plain language of their insurance contracts,” which supposedly read that First Penn-Pacific will determine life insurance rates “based on our expectations as to future mortality experience” absent any other parameters.

The plaintiff argues the above stipulation creates a “mutual and reciprocal” relationship between the defendant and proposed class members. Policyholders agree to let First Penn-Pacific increase insurance rates based on future mortality experience, the lawsuit says, and in return, the company should agree to drop customer costs should there be an improvement on future mortality experience expectations.

“First Penn, however, has failed to live up to its end of the bargain,” the case reads, claiming that nationwide mortality experience has significantly improved in recent decades without the defendant reducing its life insurance rates.