On August 6, 2013, a class action lawsuit was filed by the law firms listed below in an effort to obtain relief for approximately 150,000 individuals who purchased certain Long Term Care Insurance policies through CalPERS. This website is designed to answer many of the questions that have been raised by members of the class.
What is this case about?
This is a class action lawsuit that seeks relief for individuals who purchased certain Long Term Care (“LTC”) insurance policies through CalPERS and have been subjected to recent premium hikes of approximately 85%. The complaint alleges that CalPERS promised its policy holders that the premiums for its LTC policies were fixed for life and would never rise. The complaint further alleges that at the time CalPERS made these promises, it had underpriced its policies and knew, or should have known, that premiums were certain to rise in the future. The complaint asserts causes of action for Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing, Rescission, and Declaratory and Injunctive Relief. A copy of the complaint can be viewed by clicking here.
Do I need to do anything to be part of this lawsuit?
No. In a class action, one or more individuals files a lawsuit on behalf of many other individuals (the “Class”). If the court certifies the class, then the lawsuit proceeds on behalf of everyone who is included in the class. Once the court certifies the class, all class members will receive notice and will automatically be included in the case unless they affirmatively decide to “opt out” of the lawsuit.
In this case, the class we will be seeking to certify is defined as follows:
“All California citizens who purchased LTC1 and LTC2 policies issued from 1995-2004 with lifetime coverage and built-in inflation protection, lifetime policies without inflation protection, as well as 3-year and 6-year policies with inflation protection from CalPERS at any time.”
If you purchased a policy with three years or six years of benefits without built-in inflation protection, or a California partnership policy or a CalPERS long term care policy in 2005 or later, CalPERS has represented that you are not subject to the premium increases that are at issue in the lawsuit.
A decision on class certification should be made within the next 6 months to a year.
What are you trying to get from this lawsuit?
In our lawsuit, we seek various forms of relief including damages, a return of all premiums paid by Class Members, and an order from the court to prevent CalPERS from increasing premiums. If we prevail, we may be entitled to some or all of these forms of relief.
How long is this lawsuit likely to take?
Unfortunately, litigation such as this often takes years to resolve. Although there are no guarantees, a typical class action lawsuit usually takes from 2 ½ to 3 years to resolve.
What should I do about my policy choices now?
As you know, CalPERS has provided class members with various options concerning the continuation of their LTC policies. Your decisions going forward (whether to drop the policy, take reduced benefits, or pay higher premiums) are entirely up to you and are dependent on your individual circumstances. What we can tell you is that our lawsuit seeks a remedy for all class members no matter what decision they make concerning their policies going forward.
How can I get more information about this case as it progresses?
As this case move forward we will regularly update this website with important developments and news in the litigation.
The case is currently in full discovery mode. “Discovery” is the process by which the parties to a lawsuit obtain information from the other about their allegations and defenses. In this regard, plaintiffs have received thousands of documents from CalPers about their long term care program, how the fund was invested, how premiums were set, and the reasons why CalPerrs elected to increase premiums. The plaintiffs are currently reviewing those documents and once it is determined that all have been produced, plaintiffs will begin deposing CalPers board members and executives who were responsible for the Long Term Care Program. A deposition is the process where lawyers ask parties questions about the lawsuit and the parties are then required to answer the questions under oath.
At the same time, CalPers has begun the process of deposing the named plaintiffs who filed the lawsuit. Those depositions should be completed by the end of January.The next step in the litigation will be the filing of a Motion for Class Certification. This is the motion where the plaintiffs ask the court to allow the case to proceed as a class action instead of requiring each policy holder to bring their own individual case. This is a very important motion in the litigation. The court has set a deadline for filing this motion of May 15, 2015 and the hearing on the motion will be on July 29, 2015.
Following the court’s ruling on the Defendants’ motion to dismiss the case, CalPers asked the appellate court to review the decision. The appellate court refused to review the decision. Discovery in the case is ongoing. Plaintiffs have requested documents from CalPers and the Towers Watson Defendants. To date, Defendants have provided written responses (and objections) and produced a limited number of documents. Plaintiffs are continuing to pursue additional relevant documents. On October 10, 2014, CalPers also responded to interrogatories served by the Plaintiffs. Interrogatories are written questions that each party is allowed to ask and the other party is required to answer.
We are currently in the discovery phase of the lawsuit. Essentially, discovery is where each side (plaintiffs and defendants) is allowed to investigate the facts, witnesses, and evidence of the other side.
CalPERS filed its answer to the plaintiff’s complaint after the motion to dismiss lawsuit was denied.