The policies, the plaintiffs argue, bar the company from recovering “past losses by changing the monthly deduction rates.”
A Transamerica spokesman, Gregory Tucker, said in an email that the increases were permissible under the policies. “In 2015, based on its expectations about future performance of certain universal life policies, Transamerica prospectively increased monthly rates of these older policies,” he said. No policyholders are being charged more than the maximum rates specified in their policies, he said.
Premiums are based on multiple factors, he noted, including “interest, mortality, taxes and expenses associated with the policy.”
“Transamerica is in full compliance with its contractual obligations and intends to contest vigorously the recently filed litigation,” he said.
Mr. Tucker declined to estimate how many policies might be affected.