Supreme Court Retreats from Stephens v. Equitable
In Weathers v. Metropolitan Life Insurance Company the Mississippi Supreme Court issued its second recent opinion retreating from Stephens v. Equitable. This follows the Court's December opinion in Wilbourn v. Equitable that I discussed in this post. The cases involve a statute of limitations (deadline for filing suit) issue where the plaintiff purchased a "vanishing premium" life insurance policy and alleges deceptive sales practices by the agent and/or company.
I should disclose that I am a biased observer. I spent nearly ten years defending vanishing premium cases in Mississippi, including many cases for MetLife or related companies. I tried three vanishing premium cases to verdict for MetLife subsidiaries. I also tried a vanishing premium case to verdict for another life insurance company.
The "vanishing" premium sales pitch was a creature of the 1980's and early 1990's and depended on a rising interest rate environment. In the 1990's many life insurance companies switched their emphasis from whole life policies (with a vanishing premium illustration) to universal life policies. Sales of U.L. policies did not seem to lead to as much litigation, although there were some cases with U.L. policies allegedly sold with a vanishing premium pitch. One of the cases that I tried involved a U.L. policy. Stephens v. Equitable largely ended the litigation in Mississippi. Stephens led to many summary judgments and caused most lawyers to believe that the cases were untenable. The Court's retreat from Stephens is a win for disgruntled policy holders. But it remains to be seen whether it will reinvigorate sales practice litigation in Mississippi.
