Class Action Against Life Insurance Company Not Precluded.

Plaintiffs purchased life insurance policies. The death benefit payable to survivors varies with the performance of the funds each customer selects. Because the policyholder bears the risk associated with the investments, some federal circuits have held that the policies qualify as securities. Accordingly, the federal trial court dismissed the class action under the Securities Litigation Uniform Standards Act of 1998 [SLUSA; 15 U.S.C. §78bb(f)(1)] which bars private plaintiffs from bringing class actions under certain situations. The Ninth Circuit reversed the dismissal, stating:  “Plaintiffs allege that their insurer promised one thing and delivered another. That’s a straightforward contract claim that doesn’t rest on misrepresentation or fraudulent omission. We therefore reverse the district court’s dismissal of the two contract claims, on the condition that plaintiffs amend their complaint to remove any reference to deliberate concealment or fraudulent omission. We affirm the dismissal of the class claim for unfair competition in violation of California law.”  Freeman Investments v. Pacific Life Insurance Company  (Ninth Cir.; January 2, 2013) (Case No. 09-55513).