Transamerica Wrongfully Delays, Denies Insurance Claims Made Under Group Policies, Class Action Alleges

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A proposed class action alleges Transamerica Corporation and parent company Aegon N.V. have a “long and extensive” history of wrongfully delaying or denying coverage claims filed by those insured under group policies.

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The 25-page case was filed by a JCPenney credit card holder who, in 2013, bought a group hospital indemnity policy offered to her by the retailer and Transamerica Life Insurance Company. However, when the Mississippi woman attempted to file a claim on the insurer’s website three months after sustaining serious injuries in a May 2021 car accident, Transamerica said it failed to recognize her name and group policy number, the lawsuit alleges.

According to the case, the plaintiff attempted to correct the situation by contacting Transamerica’s representatives, claims department and division counsel without success.

It was only after the Mississippi Insurance Department in October 2021 brought an oral complaint made by plaintiff to Transamerica’s attention that the company finally verified that the woman was insured under its policy, the suit relays.

Then, in December 2021, a consumer complaint was submitted to the Mississippi Insurance Department due to “the lack of explanation for denial of coverage, delay in recognizing the existence of the JCPenney group hospital indemnity insurance policy, delay in recognizing the name of a group policy listed on the credit card statement showing customer as an insured under the policy, [and] delay in producing the policy,” the lawsuit says.

The complaint also names as a defendant TCS e-Serve International Limited, a third-party administrator for Transamerica that incorrectly informed the Mississippi Insurance Department that the plaintiff’s complaint had been “resolved,” which the case contends was an intentional act “to cover its practice of claim denial and coverage denial.” 

“Transamerica knew or should have known that its failure to recognize an insured’s name, including but not limited to the name of Plaintiff, and the group policy number shown on JCPenney credit card statements, including Plaintiff’s, would likely result in confusion of unsophisticated insureds and deter insureds from pursing their claims, thereby effectively reducing Transamerica’s exposure to pay legitimate claims,” the suit charges.

Per the filing, the defendants’ “improper” claims-handling practices violate insurance law that requires insurers and their agents to timely and reasonably investigate, adjust and pay insureds’ claims.

The lawsuit looks to represent all persons and legal entities insured under a Transamerica group policy who attempted to make claims and whose claims were prevented or delayed by the defendants’ customs and practices related to Transamerica’s policies.

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