Hagens Berman: Class-Action Lawsuit Accuses CNA Financial of Bait-and-Switch Premium Increases for Long-Term Care Insurance Customers
Attorneys say CNA doubled premiums for some customers and not others, despite promises of only across-the-board increases
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
“What our client experienced is nothing short of bait-and-switch tactics,” Berman added.
The lawsuit was filed
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
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
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