CHICAGO--(BUSINESS WIRE)--A new class-action lawsuit accuses CNA Financial of illegally raising premium costs for its long-term care insurance policyholders in a nationwide scam that Hagens Berman attorneys say served as a “bait-and-switch” to lure those looking to lower their future insurance costs.
The lawsuit claims CNA enticed would-be customers with empty promises of low, stable insurance premiums that would not increase unless premiums increased for everyone of the same age and coverage plan. Despite its own promises, CNA increased the premium of the lawsuit’s plaintiff by 95 percent, and admitted the increase was not uniform for everyone in the same age category or premium class.
“Thousands of customers have paid CNA for peace of mind, and paid CNA for what it promised in its promotional materials: that individual rates would not increase unless they increased for everyone else in the same category,” said Steve Berman, managing partner of Hagens Berman. “We believe CNA lured in would-be customers with promises of fair and evenhanded premiums early in life, only to single out people in certain states for massive rate increases later when it is too late for them to find better coverage elsewhere.”
“What our client experienced is nothing short of bait-and-switch tactics,” Berman added.
The lawsuit was filed May 9, 2018, in the U.S. District Court for the Northern District of Illinois and seeks recovery for CNA’s long-term care insurance customers.
What CNA Financial Promised
When it marketed the Policy to plaintiff, CNA provided a brochure that assured plaintiff and class members that the Policy would provide long-term stability and that Plaintiff and other class members would not be subject to disparate or discriminatory rate increases, according to the lawsuit.
In the details of CNA’s long-term care policy, the insurance company promises its would-be customers they will not pay an unequal share of overall premium costs, stating, “We cannot change the Insured’s premiums because of age or health. We can, however, change the Insured’s premiums based on his or her premium class, but only if We change the premiums of all other Insureds in the same premium class.”
In another part of the brochure, CNA says, “…for premiums to change, CNA would have to change premiums for everyone in your age category who has the kind of coverage plan that you do.”
According to the lawsuit, customers expected that if premiums increased they would not end up paying more than their peers under the policy or bearing a disproportionate cost of the overall risk. “We believe this language clearly explains CNA’s empty promise and sales pitch that if someone age 70 in Washington D.C. receives a premium increase, someone of the same age and health across the country will be paying the same rate for the same insurance benefits,” Berman added. “CNA failed to uphold this.”
What CNA Financial Policyholders Received
The lawsuit explains CNA’s actual practices: “Rather than obtaining peace of mind, these insureds suffer with the uncertainty of future premium increases, the risk of long-term care expenses that could arise, and the unavailability of affordable coverage alternatives now that they have reached a more advanced age.”
Long-term care insurance pays for a variety of services for people who are unable to care for themselves, and services may include assistance in a home, adult day care center, an assisted living facility, or nursing home. Premiums for long-term care coverage are generally set at the same level for a given age category, according to the lawsuit.
The lawsuit seeks rescission of their insurance contracts and restoration of premiums paid or, in the alternative, declaratory and injunctive relief, disgorgement of ill-gotten gains, and compensatory, statutory, and punitive damages.
Find out more about the lawsuit against CNA Financial for long-term care insurance policyholders.
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with 11 offices across the country. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at https://www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
