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Commonly Asked Questions


1. Why did I receive a notice and claim form?

Answer:

If you were sent a notice and claim form it is because you own or owned a Level Term 2, Series 5.0, 5.1, 5.2, & 5.3; Level Term 2X, Series 6.0, 6.1, 6.2, & 6.3; or Level Term 3, Series 6.0, 6.1, 6.11, 6.2, 6.3, 6.4, 6.5, 6.6, & 6.7 term life insurance policy from USAA Life. If you did not own one of these policies, you cannot make a valid claim.  The Court ordered this notice be sent to you because you have a right to know about a proposed settlement of this class action lawsuit.  The settlement was approved at the Fairness Hearing, and Defendant will provide the settlement benefit based upon the category you fall under as described in the answer to Question 8 below, and as indicated on the claim form if you received one.  The deadline to file a claim was April 18, 2017 and the deadline has passed.

The notice explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to receive them.  The Court in charge of the case is the Circuit Court of Barbour County, Alabama, Eufaula Division, and the case is known as Erkins v. USAA Life Insurance Co., Civil Action No. 2015-CV-900077. The person who sued is called “Plaintiff,” and the company he sued, USAA Life, is called the “Defendant.

2. What is this lawsuit about?

Answer:

The life insurance policies at issue provide a death benefit if the insured dies while the policy is in effect. As "term life" policies, they were not intended to provide any cash surrender or other investment or savings value for the policy owner. As provided in the policy, the death benefit remains the same for a set period of time – the "Level Benefit Period" -- after which the death benefit decreases each year. The policies also provide for level premium rates for a set period of time – the "Level Premium Period" – after which the premiums may increase. Depending on the policy, the Level Premium Period ranges from 5 years to 30 years.

Defendant did not increase premium rates on any of the policies at issue in this case before the end of the Level Benefit Period, but a premium increase has been planned to take effect after the Level Benefit Period.

The Plaintiff says the decision to increase premium rates on in-force policies after the end of the Level Benefit Period was based on factors other than those specifically allowed by the policies. In particular, Plaintiff alleges that the decision to increase premium rates was based on factors other than Defendant’s expectations about future mortality, expense and investment experience. Plaintiff also alleges that certain policies generated cash values for which some policyholders -- including certain policyholders who surrendered their policies before 2008 -- were not compensated. The Defendant denies it did anything wrong and believes its actions were permitted by the policies and complied with all laws.


3. Why is this a class action?

Answer:

In a class action, one or more people, called Class Representatives (in this case Moses Erkins), sues on behalf of people who have similar claims. All these people are a Class or Class Members. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class. Judge Burt Smithart is in charge of this class action.

4. Why is there a settlement?

Answer:

The Court did not decide in favor of Plaintiff or Defendant. Instead, both sides agreed to a settlement. That way, they avoid the risk and cost of a trial, and the people affected will receive compensation. The Class Representative and the attorneys appointed by the Court to represent the Class think the settlement is fair for everyone in the Class.

5. How do I know if I am a class member?

Answer:

Everyone who fits into one of the following descriptions is a Class Member:

(1) People who own or owned a USAA Life Level Term 2, Series 5.0, 5.1, 5.2, & 5.3; Level Term 2X, Series 6.0, 6.1, 6.2, & 6.3; and Level Term 3, Series 6.0, 6.1, 6.11, 6.2, 6.3, 6.4, 6.5, 6.6, & 6.7 term life insurance policy at any time between January 1, 2008 and December 15, 2016.

(2) Certain persons who owned a USAA Life Level Term 2, Series 5.0, 5.1, 5.2, & 5.3; Level Term 2X, Series 6.0, 6.1, 6.2, & 6.3; and Level Term 3, Series 6.0, 6.1, 6.11, 6.2, 6.3, 6.4, 6.5, 6.6, & 6.7 term life insurance policy, but the policy terminated before January 1, 2008.

6. Who is excluded from the class definitions?

Answer:

Excluded from the Settlement Class are: (1) any person or entity that currently is in bankruptcy; (2) the Released Parties, their officers, directors, shareholders, employees, and agents, or any affiliate of the Released Parties, and each of their heirs, successors, or assigns; (3) Class Counsel and their employees; (4) any judge, justice, or judicial official, and any immediate family of any such judge, justice, or judicial official; (5) the staff of the judge presiding over this action; (6) for all categories other than Category B, Owners whose Policies:

(i) terminated by reason of the death of the Policy Insured, (ii) entered waiver of premium status, (iii) were converted to permanent coverage before the Cutoff Date, or (iv) were not subject to a premium rate increase; (7) any person or entity who has previously released Defendant from any of the claims released in this settlement; and (8) all persons and entities that submitted a timely and valid written request to be excluded from the Settlement Class. If an Owner owns more than one Policy, the Owner shall remain in the Settlement Class only with respect to Policies that are not excluded from the Settlement Class.

7. What does the settlement provide?

Answer:

Defendant has agreed to provide Settlement Class Members who submit a valid and timely claim form either a two-year term certificate or a single payment of varying amounts, depending on the category the Eligible Settlement Class Member falls under. The categories are:

Category A - In-Force Policy still in the Level Benefit Period as of October 31, 2016

Category B - Policy Terminated after December 31, 2007, and Owner paid Additional Premium

Category C - In-Force Policy beyond Level Benefit Period and Owner has paid an Additional Premium

Category D - Policy Terminated after December 31, 2007 while still in the Level Benefit Period

Category E - Policies Designated by USAA as “Settlement Category E” Policies that terminated before January 1, 2008

8. What can I receive from the settlement?

Answer:

The Defendant has agreed to provide additional written notice to all In-Force Policy Owners to inform them that their premium will increase after the Level Benefit Expiration Date. The Defendant is also agreeing not to conduct any additional re-pricing of the Policies for five years after the Effective Date of the settlement.  Class Members who submit a timely and valid claim form will receive the following relief, depending on which category they fall under:

Category A - In-Force Policy still in the Level Benefit Period as of October 31, 2016.  A two-year Term Certificate with a death benefit payment equal to ten percent of the Policy’s Face Amount as of October 31, 2016. The Term Certificate shall be subject to the terms and conditions listed on the certificate.  For in-force Level Term 2, 2X or 3 riders, Defendant shall also issue a two-year Term Certificate with a death benefit payment equal to ten percent of the term rider’s Face Amount as of October 21, 2016.  If a Policy has multiple Owners, only one Term Certificate will be issued in the name of all Owners of that Policy.

Category B - Policy Terminated after December 31, 2007 and Owner paid Additional Premium.  A single payment for an amount of forty (40%) percent of the Increased Premium Amount paid by the Eligible Settlement Class Member.

Category C - In-Force Policy beyond Level Benefit Period as of October 31, 2016 and Owner has paid Additional Premium.  One of these two options:

1. A two-year Term Certificate with a death benefit payment equal to ten percent of the Policy’s Face Amount as of October 31, 2016. The Term Certificate shall be subject to the terms and conditions listed on the certificate.

2. A single payment for forty (40%) percent of the Increased Premium Amount paid by the Eligible Settlement Class Member.

The Class Member must choose one of these two options when submitting his or her claim form.

Category D - Policy Terminated after December 31, 2007 while still in the Level Benefit Period. A single payment of $100.

Category E - Policies Designated by Defendant as “Settlement Category E” Policies that terminated prior to January 1, 2008.  A single payment of $100.

9. How can I receive the settlement benefits?

Answer:

The deadline to file a claim was April 18, 2017 and has passed.

10. When would I receive the benefits, including any payment I may be entitled to?

Answer:

As of July 17, 2017, Class Members who submitted a valid and timely claim form were sent either a two-year term certificate or single payment, depending on the category the Eligible Settlement Class Member fell under or chose.

11. What am I giving up to receive a payment or to stay in the Class?

Answer:

Unless you excluded yourself, you are staying in the Class, and that means you cannot sue, continue to sue, or be part of any other lawsuit against Defendant about the legal issues in this case. It also means the Court’s orders will apply to you. You also agree to release all claims against Defendant, including all claims asserted in this litigation and all claims for any alleged failure to comply with any law, regulation, actuarial guidelines or the terms of any Policy. However, if you have a claim over the payment or non-payment of death benefits, this settlement and release will not affect that claim. 

With respect to all released claims, settlement class members agree that they are expressly waiving to the fullest extent permitted by law (a) the provisions, rights, and benefits conferred by Section 1542 of the California Civil Code, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor and (b) any law of any state of the United States, federal law, or principle of common law, which is similar to Section 1542 of the California Civil Code.

12. How do I get out of the settlement?

Answer:

The deadline to exclude yourself from the settlement was March 3, 2017.

If you excluded yourself, you will not receive any settlement benefits and you are not legally bound by anything that happens in this lawsuit. You may be able to sue (or continue to sue) Defendant in the future.

13. If I did not exclude myself, may I sue Defendant for the same thing later?

Answer:

No. Unless you excluded yourself, you gave up the right to sue Defendant for the claims that this settlement resolves. If you have a pending lawsuit, speak to your lawyer in that lawsuit immediately. The exclusion deadline was March 3, 2017.

14. If I exclude myself, can I receive money from this settlement?

Answer:

No. If you excluded yourself, you may not also submit a Claim Form to ask for a two-year Term Certificate or any money.

15. Do I have a lawyer in this case?

Answer:

Robert G. Methvin, Jr., James M. Terrell, P. Michael Yancey and Rodney E. Miller of McCallum, Methvin & Terrell, P.C. in Birmingham, Alabama represent you and other Class Members in this case. These lawyers are called Class Counsel. If you want to be represented by your own lawyer, you may hire one at your own expense.

16. How will the lawyers be paid?

Answer:

Class Counsel will ask the Court for reimbursement of attorneys’ fees and expenses up to $4,500,000. Class Counsel will also ask the Court to award the named Plaintiff an incentive award of $12,500 for his time and effort in pursuing this class action. The amount of any attorneys’ fees, expenses and class representative incentive payment awarded by the Court will not reduce the benefit you are eligible to receive under the settlement. Defendant has agreed to pay these fees and expenses in addition to the benefits provided under the settlement. Defendant will also pay the costs to administer the settlement.

17. How do I tell the Court that I do not like the settlement?

Answer:

The deadline to object to the settlement was March 3, 2017, and has passed.

18. What is the difference between objecting and excluding myself from the class?

Answer:

Objecting is simply telling the Court that you do not like something about the settlement. The deadline to object to the proposed settlement was March 3, 2017. Excluding yourself is telling the Court that you do not want to be part of the Class. The deadline to exclude yourself from the proposed settlement was March 3, 2017.

19. When and where will the Court decide whether to approve the settlement?

Answer:

The Court approved the settlement at the Final Approval Hearing on April 3, 2017

20. Did I have to come to the hearing?

Answer:

No. Class Counsel answered any questions the Court may have had. The Fairness Hearing has taken place and the Court has approved the Settlement.

21. Could I have spoken at the hearing?

Answer:

The deadline to ask to speak at the hearing was March 3, 2017, and has passed. You may have asked the Court for permission to speak at the Final Approval Hearing. You could not have spoke at the hearing if you excluded yourself.

22. What happens if I do nothing at all?

Answer:

If you do nothing, you’ll get no benefits or money from this settlement. The only way to get benefits or money is to submit a valid and timely Claim Form. The Defendant will still be required to provide information to you about the premium increase and may not conduct any additional repricing of your policy within the five years following the settlement Effective Date.

Also if you do nothing, and unless you exclude yourself, you will be bound to the terms of the settlement agreement releasing the Defendant from the legal claims in this case and you won’t be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Defendant about the legal issues in this case, ever again.

NOTE: If you are currently a USAA member, submitting this claim will have NO effect on your membership and will not reduce any other USAA benefits or services.

23. How can I find more details about the settlement?

Answer:

This notice summarizes the proposed settlement. You can see the full Settlement Agreement by visiting www.leveltermpolicysettlement.com or by contacting the Settlement Administrator at 1-800-711-7362.

PLEASE DO NOT CALL USAA LIFE, THE COURT OR THE COURT’S CLERK’S OFFICE TO INQUIRE ABOUT THIS SETTLEMENT OR THE CLAIM PROCESS.



Disclaimer

This notice only summarizes the proposed settlement. If you have additional questions, you should contact the Settlement Administrator at 1-800-711-7362.

PLEASE DO NOT CALL USAA LIFE, THE COURT OR THE COURT’S CLERK’S OFFICE TO INQUIRE ABOUT THIS SETTLEMENT OR THE CLAIM PROCESS.

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