Although Largely Deflated, IUL Illustration Statute Lawsuit Rolls On

Almost a year ago, the U.S. Court of Appeals for the Ninth Circuit ruled that an alleged violation of California's illustration statutes could serve as a predicate for liability under the California Unfair Competition Law. Since then, the case in which that decision was rendered has yielded some interesting results. The case I'm referring to is Walker v. Life Insurance Company of the Southwest.

As a refresher, the Ninth Circuit ruling reversed in part a decision by the U.S. District Court for the Central District of California in a certified class action of indexed universal life policyholders residing in California.

California's illustration statutes, as listed in the California Insurance Code, are substantially similar to NAIC Model 582, and apply to all individual life insurance policies sold in California, with a few exceptions. The Ninth Circuit affirmed the district court's finding that the illustrations of the policy charges and interest rates were not