Insurance associations sue U.S. DOL: Legal news

June 19, 2024 4:25 PM

Looking up at the sky with building in a circle around.

Enjoy complimentary access to top ideas and insights — selected by our editors.

Digital Insurance reviews a high volume of news leads every week for this and other stories. Please send press releases and other information to kaitlyn.mattson@arizent.com.

Insurance associations sue DOL over fiduciary rule

Nine insurance trade associations filed a lawsuit against the U.S. Department of Labor (DOL) to overturn an amendment that prohibits transaction exemptions available to investment advice fiduciaries. The trade associations say it limits consumers' choice of financial professional and access to retirement products. The associations filed the lawsuit in the United States District Court for the Northern District of Texas, which is within the jurisdiction of the Fifth Circuit Court of Appeals.

The American Council of Life Insurers (ACLI), National Association of Insurance and Financial Advisors (NAIFA), NAIFA-Texas, NAIFA-Dallas, NAIFA-Fort Worth, NAIFA-POET, Finseca, Insured Retirement Institute (IRI), and National Association for Fixed Annuities (NAFA) issued the following comments:

"The legal action we are taking today comes after careful deliberation on what is in the best interest of the retirement savers we serve. Our filing makes a convincing case that the DOL's fiduciary-only regulation suffers from the same legal defects as the DOL's failed 2016 rule. It exceeds the DOL's authority under federal law, is arbitrary and capricious, and is unconstitutional. Moreover, it ignores recently enhanced federal and state standards for financial professionals who work with retirement savers."

Alameda County DA announces lawsuit against auto insurance companies

California's Alameda County District Attorney Pamela Price announced that the Consumer Justice Bureau has sued multiple auto insurance companies and software developers for allegedly working together to create auto valuation software and undervalue totaled vehicles to pay insurance consumers less than the value owed under the policies.

The civil consumer protection Complaint filed in Alameda Superior Court on April 26, 2024, amended on April 30, alleges that Progressive and its affiliates United Services Automobile Association owed duties of good faith and fair dealing to "hundreds of thousands of California residents and businesses each year."

GEICO employees file lawsuits

Two separate lawsuits have been consolidated that allege GEICO failed to pay employees at the Macon, Georgia call center. One case was filed by Plaintiffs Cherale Willis, Sandy Colbert, Tiffaney Peacock, and Caral Taylor, on behalf of themselves and similarly situated employees, to recover unpaid overtime wages under the Fair Labor Standards Act. It will be combined with another case, Benvenutti v. Government Employees Ins. Co. d/b/a GEICO et al., No. 5:22-cv-00182-MTT (M.D. Ga.). Benvenutti, a former claims service representative, alleges GEICO failed to pay her and similarly situated employees for all the hours worked.