Life insurance company in court battle over breach of contract

Oct 06, 2011

A life insurance is in court over a breach of contract matter.

Northwestern Mutual Life Insurance Company has gone through two years of litigation and a two-week non-jury trail on a breach of contract matter, which found that the company breached contracts with thousands of policyholders, but now the case may be going to U.S. courts again after an unfavorable ruling, according to the Milwaukee-Wisconsin Journal Sentinel.

The news source said Reserve Judge Dennis Flynn found in a "strongly worded" order in March that the company breached contracts when it changed how dividends were paid on some annuities sold before 1985. The company's lawyers told the judge it recently discovered Flynn owned two policies with them years ago, including an annuity, and should have disclosed this. In a detailed response, Flynn said he had no memory of the policies more than 30 years ago and said it would not have affected his impartiality in the decision.

Flynn questioned why the company didn't bring the matter to the court's attention earlier and why it was brought only after a decision against the company's favor, according to the Journal Sentinel. The judge said the company should now be subject to further inquiry on the issue by the other side.

In a case where a life insurance company succeeded in a court battle, the court ruled in favor of American Family Mutual Insurance Company versus Richard McGuire. McGuire claimed breach of contract and breach of implied covenant of good faith by the company, but court documents say he was ruled against.

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