Banner Life Insurance Company Defeats Putative Nationwide Class Action

Banner Life Insurance Company, a leading provider of life insurance products, achieved complete victory in a putative nationwide class action lawsuit. Faegre Drinker represented Banner Life and its parent, Legal & General America, Inc., in defending claims brought by policyowners who alleged the companies misrepresented how their $1 million flexible premium universal life policies would operate, and effectively asserted they were not responsible for increased cost of insurance during the 20-year no-lapse guarantee period. Plaintiffs sought a wide array of damages, including actual and consequential damages, disgorgement, punitive and treble damages, interest, and attorney's fees, with claims exceeding the $5 million Class Action Fairness Act threshold.

On September 30, 2024, the US District Court for the District of Maryland granted the defendants’ motions to dismiss the first amended complaint and denied plaintiffs’ request to file a second amended complaint, dismissing the entire case with prejudice. The dismissal was grounded in res judicata, release, and collateral estoppel, based on a prior cost of insurance class action settlement affirmed by the Fourth Circuit in 1988 Trust for Allen Children v. Banner Life Insurance Company, et al., 28 F.4th 513 (4th Cir. 2022). The court’s decision underscored the binding effect of previous settlements and judgments on similar claims. See also 4th Circ.'s Allen Trust Opinion: A New Class Action Primer - Law360 UK