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Long-term care insurance settlement objections rejected

Where three persons argued that it was unfair to send rate increase letters to class members during the same time period as settlement negotiations and preliminary approval of a putative class-action suit over long-term care policies was occurring, their objections were overruled.


Plaintiffs filed a putative class action complaint against Genworth Life Insurance Company and Genworth Life Insurance Company of New York, alleging that defendants failed to disclose material information to policyholders of long-term care, or LTC, policies, to their detriment.

The parties reached a settlement which the court preliminary approved. Gary Davis, on behalf of himself and his wife, Lorraine Freedlander, has objected to the amended settlement agreement. Kathryn Dimiduk also made an objection.

Rate increase letters

Davis, Freedlander and Dimiduk’s objections essentially question the fairness of sending rate increase letters to class members during the same time period as settlement negotiations and preliminary approval and whether Fed. R. Civ. P. 23 requires notifying class members of the settlement before the formal notice period. The court finds it does not.

Rule 23 is based on the fundamental principle that all members of the class receive the same notice at the same time so they can make decisions on whether to be included in the settlement or not. This ensures that every person in the class is treated fairly and that no one receives an unfair advantage over other class members in terms of personal decisions that would be affected by the settlement.

There is nothing in Rule 23 or case law provided to the court that requires any other type of notice, including “pre-notice notice” or ad hoc notice, be sent out to the class. Sending “pre-notice notice” only to a sub-section of the class would be inconsistent with the equitable principles animating Rule 23. And, sending a “pre-notice notice” to the entire class is an option fraught with problems and a high risk or confusion.

Moreover, there is nothing in Rule 23 that required pre-notice notice of the sort urged by Davis, Freedlander and Dimiduk in the rate increase letters they received or the letters confirming their changes. In any event, the presence of the 60-day reversal option strikes the proper balance between the circumstances faced by Davis, Freedlander and Dimiduk and the sending of the pre-notice notice. And, in fact, that provision forecloses the finding of harm upon which the objections are based.

60-day reversal period

Davis asserts two arguments addressed to the 60-day reversal provision in the rate increase letter. First, he argues that the reversal provision should have been featured more prominently in the rate increase letter to alert him to its existence. However the court must presume that Davis and Freedlander read the rate increase letter in its entirety, including the provision about the 60-day reversal period. The reversal provision certainly was not hidden in the rate increase letter, so the court cannot rule in Davis’s favor on this ground.

Second, Davis argues that the formal class notice should have informed all class members of the reversal provision. But that information would not be considered material to the reasonable class member who was making a decision on whether to opt out or remain in the settlement, so it was not necessary to include it in the formal notice. Accordingly, the objections on these grounds must be overruled.


Davis and Freedlander also object to the fact that they had to decide whether or not to opt out of the settlement before receiving information about future rate increases. It is fair and reasonable to require the opt-out decision before the details of the forthcoming disclosure are made because the disclosures will be accompanied by the right to make elections in light of the disclosures. That is what this action is all about. That is what the plaintiffs say they were entitled to initially, and, as relief in this case, and, that is what the class is getting by virtue of the settlement agreement.


Davis and Freedlander object to the lack of damages payment to class members who ultimately choose to maintain their current insurance benefit plan rather than choose one of the given settlement options. The complaint sought relief for Genworth’s failure to disclose planned rate increases, and the equitable remedy for that harm would be to put class members in the position they should have been in. Cash damages would be inappropriate to those class members who receive the disclosures and choose to maintain their current benefits because they were already made whole by the new disclosures and opportunity to revise their past benefits election.

Davis, Freedlander and Dimiduk objections overruled.

Haney v. Genworth Life Insurance Co., Case No. 3:22-cv-55, Jan. 26, 2023. EDVA at Richmond (Payne). VLW 023-3-032. 40 pp.

VLW 023-3-032