Milwaukee Insurance Dispute Lawyer Shares Big News
Northwestern Mutual Insurance: Bad faith with annuity payments
On behalf of Milwaukee personal injury attorney Ric Domnitz of Domnitz & Domnitz, S.C. posted in Insurance Claims on Friday, March 25, 2011.
A judge in Racine has ruled that Milwaukee-based Northwestern Mutual Life Insurance Co. was guilty of bad faith, breach of fiduciary duty and breach of contract when it unilaterally changed how customers’ dividends would be paid on annuities it sold before 1985. According to the ruling, the insurance company switched the investment of the annuities into short-term bonds, and gave the customers interest payments on those bonds instead of annuity dividends, costing them hundreds of thousands of dollars.
The ruling by Reserve Judge Dennis Flynn comes as a result of a class-action lawsuit brought against the insurance company by about 3,600 Wisconsin customers who bought annuities from Northwestern Mutual before 1985. The lawsuit claimed that their annuity contracts required Northwestern Mutual to pay dividends from its general portfolio. Instead, the insurer called the payments dividends when they were actually interest payments on the bonds.
The full amount owed to the class of plaintiffs has yet to be determined. It will be based on a calculation of the difference between the dividends paid to other policy holders and what was paid to the class of annuity holders. The lawyer representing the plaintiffs estimates that Northwestern Mutual will end up owing the class of plaintiffs an amount “in the significant nine figures.”
The insurance company plans to appeal the ruling, according to Northwestern Mutual spokesperson Jean Towell. The plaintiffs’ lawyer told reporters that he plans to move forward immediately with an action to recover the payments that were denied in bad faith and in breach of the company’s duty to its customers.
Source: Insurance & Financial Advisor, “Court: Insurer disregards fiduciary, good faith duties in annuities,” Jaime L. Brockway, March 25, 2011
Do you need legal help from a Milwaukee personal injury attorney for a bad faith claim? Contact Domnitz & Domnitz, S.C. today.