Pacific Life agrees to a $58M settlement in California PDX class action

Anyone who purchased a Pacific Discovery Xelerator indexed universal life insurance policy in California between 2016 and 2019 could be eligible for a piece of a $58 million settlement.

Pacific Life Insurance Co. recently agreed to the settlement in a class-action lawsuit filed in June 2021 in California Superior Court for Orange County. Plaintiff Abigail Mamboleo accused Pacific Life of using misleading illustrations to sell PDX policies.

These illustrations allegedly showed inflated profitability, causing policyholders to pay “hidden costs that essentially eliminate the value in the PDX Policies,” the class action lawsuit said.

The two sides agreed to the settlement late in 2025 and it is scheduled for final approval on May 7, court documents say. Eligible PDX owners have until April 10 to submit a claim and join the settlement.

A spokesman for PacLife declined to comment Monday.

Settlement terms

Under the tentative settlement terms, current policyholders with in-force accounts will receive credits directly to their policy’s accumulated value from a $33 million fund. The exact payout for each individual will be calculated based on their proportional contribution to the total premium pool.

Former policyholders whose accounts have been terminated are also eligible for relief. This group may receive up to three years of term life insurance coverage, with the total settlement relief for this category capped at $25 million. Notably, the new coverage will apply to the same individual originally insured under the eligible policies.

The settlement is the latest chapter in PacLife’s controversial history with IUL. The insurer’s PDX product is the subject of several similar state and federal lawsuits around the country.

Notably, NASCAR racing star Kyle Busch claims that PacLife used misleading illustrations, undisclosed costs, and false promises of guaranteed multipliers and controllable charges in an IUL plan. The Busches paid more than $10.4 million in premiums, resulting in net out-of-pocket losses exceeding $8.58 million, their complaint alleges.

PacLife and its appointed agent, Rodney Smith, allegedly designed and promoted a series of complex IUL policies as "tax-free retirement plans" that were misrepresented as safe, self-funding investment vehicles, the Busches claim in a lawsuit filed in North Carolina.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.