Shernoff Bidart Echeverria Bentley LLP: Superior Court Approves Class Certification in Lawsuit Against CalPERS
"We are pleased with the court's ruling granting class certification in this case," said attorney
CalPERS first offered long term care (LTC) insurance in 1995 with roughly 119,000 people initially signing up. As of
"We believe the evidence will show that CalPERS knew 20 years ago that it would be required to substantially increase rates in the future but withheld this information from policyholders who were told that rates were 'designed to remain level,'" said
The lawsuit alleges the following:
- CalPERS claimed that it had the requisite experience to properly underwrite the LTC policies so as to insure that the funds were carefully and prudently managed.
- In uniform promotional materials, CalPERS repeatedly touted the financial stability and strength of its LTC program.
- CalPERS suddenly and unexpectedly advised its policyholders that its LTC insurance program was grossly underfunded and that CalPERS, unbeknownst to Plaintiffs and the other members of the Class, had stopped enrolling new members in 2009.
- CalPERS admitted that it had engaged in an improper investment strategy. For years CalPERS had been pursuing an aggressive 65% equity investment strategy, until, in 2013 it abruptly shifted to a more stable and conservative 15% investment strategy. The net result was that the LTC policy fund had been, and would remain, grossly underfunded.
- CalPERS was expressly warned by an outside consultant in 1996 that its decision to invest such a large percentage of the LTC fund in equities was not prudent and created a substantial likelihood that rates would have to be increased in the future.
- CalPERS failed to warn policyholders of the program's financial problems and, in fact, told policyholders the opposite; that the program was strong and financially sound.
The case is
The plaintiffs are represented by
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About Kershaw, Cook & Talley, PC
Kershaw, Cook & Talley is a complex litigation and personal injury law firm representing individuals and businesses nationwide. The firm was founded on the principle of helping clients through personal service. This commitment to clients and passion for justice has led to a statewide and national reputation for providing exceptional legal representation and obtaining significant victories.
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