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A customer lawsuit that was filed against Carmel-based insurer CNO Financial Group Inc. more than a decade ago is set to go to trial starting next month.
In the lawsuit, filed in 2012, two former CNO life insurance policyholders accused the company of overcharging them through “massive” increases to their premiums and cost of insurance charges. The plaintiffs say those increases led them, and thousands of other policyholders, to either give up their policies or let them lapse, resulting in the loss of tens of millions of dollars in valuable life insurance policies.
“We have been litigating the case ever since,” said Washington, D.C.-based attorney Stephen Weisbrod of Weisbrod Matteis & Copley PLLC, which is part of the plaintiffs’ legal team. Indianapolis-based DeLaney & DeLaney LLC is also representing the plaintiffs in this case.
CNO is represented by Atlanta-based law firm Alston & Bird LLP. Attorney Adam Kaiser, who works in Alston & Bird’s New York City office, declined to comment on the case citing the pending litigation. CNO itself also declined to comment.
The nationwide class-action lawsuit, originally filed in California, was transferred to U.S. District Court in the Southern District of Indiana in 2018. Plaintiffs are William Burnett of Missouri and Joe Camp of North Carolina. The defendants are CNO Financial Group and its affiliate, CNO Services LLC.
Conseco Life Insurance Co., which operated under corporate parent CNO Financial Group, was also originally named as a defendant. CNO sold Conseco Life Insurance to Connecticut-based Wilton Reassurance Co. in 2014.
In January 2021, the court approved a class-action settlement in which Conseco Life paid $27 million, less fees and expenses, to about 3,666 former Conseco Life policyholders. The policyholders were to receive at least $500 each, but most were expected to receive $1,000 or more.
Weisbrod described the 2021 settlement as a “partial payment” that did not cover the full liability of all members of the class. An additional $70 million is being sought for the 2,000 or so class members who have not yet been fully compensated for their losses, he said.
Different aspects of the case will be heard in two separate trials. The first, which is scheduled to begin June 16, will be a jury trial focused on the breach of contract claims.
In a court filing earlier this month, CNO conceded that Conseco Life breached the plaintiffs’ policies by, among other things, making improper premium calculations and “demanding substantial annual premiums going forward.”
Since CNO has conceded the breaches, the June trial will focus on whether those breaches caused Burnett and Camp to surrender their policies; whether Burnett and Camp suffered damages because of the breaches; and if so, the amount of those damages.
A bench trial—heard by and decided by a judge with no jury—is set for Aug. 25. That August trial will focus on issues of what are known as “alter ego” or “piercing the corporate veil”—whether CNO can be held liable for Conseco Life’s breaches.
If the August trial finds that CNO is liable for the breaches, Weisbrod said, there will be separate proceedings to determine the damages for each of the other 2,000 or so class members.
CNO provides life and health insurance, annuities, financial services and workforce benefits solutions through its various brands, including Bankers Life, Colonial Penn, Optavise and Washington National.
In 2024, CNO reported revenue of $4.4 billion and a profit of $404 million.
The company has about 3,400 full-time employees.
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