Ring et al. Wins Remand in a suit v. AXA Financial, Inc. and Equitable Life Assurance Society of the U.S.

April 10, 2007 -- Owners of life insurance policies with a children’s term rider may have a claim for deceptive practices under New York law if the insurance company continues to bill for the premium including for the Child Rider after the youngest reaches age 25 and is no longer “a child” within the meaning of the policy.  A unanimous decision written by Judge Pooler of the U.S. Court of Appeals for the Second Circuit  ruled on Friday, April 6, 2007 that the class action claim of Shirley Ring that billing for the premium for child term rider insurance offered by Equitable Life and its parent company AXA, may be a deceptive business practice under the law of New York after the policy ceases to provide coverage because the child or youngest child has reached age 25. 

The plaintiff Ms. Ring and the class of premium payers are represented by Joshua N. Rose of Rose & Rose, P.C., a Washington, D.C.-based law firm.  Rose & Rose received a favorable ruling in November 2006 from the New York State Appellate Division concerning a similar claim against the Metropolitan Life Insurance Co.

Plaintiff Ms. Ring claims the child rider premium violates New York consumer protection law GBL 349.  Equitable moved to dismiss the state law claims as completely pre-empted by federal law, namely the Securities Litigation Uniform Standards Act of 1998 (SLUSA). 

The question was whether the Children’s Term Rider that is not by itself a “covered security” becomes one, and thus is subject to removal and dismissal under the SLUSA, because it is attached to a variable life insurance policy under the definition of a “covered security.”  The appellate court ruled that the Children’s Term Rider and the policy it was attached to must be considered separately, as opposed to the district court, which analyzed them together. 

The Court of Appeals vacated the judgment of the district court, and remanded the matter to the district court with instructions to send the case to the New York County Supreme Court. 

 

Media Contact:
Joshua Rose
202-331-8556

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