The 8th US Court of Appeals has ruled that State Farm Life Insurance must repay policyholders in Missouri over $34 million, for charging them undisclosed fees.
A 25,000-member class action lawsuit was filed against State Farm in 2016 – the plaintiffs were individuals who had obtained life insurance from the company between 1994 and 2004. The suit alleged that while State Farm’s whole life insurance policies’ premiums were said to be based on customers’ age, sex, and applicable rate class, the insurer was also using other “non-mortality factors” to determine pricing – such as taxes, profit assumptions, investment earnings, and capital & reserve requirements – which added hidden fees to the total cost of insurance.
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