You have a right to know about a proposed Settlement and your rights and options before the Court decides whether to approve the Settlement.

Judge Daniel D. Domenico of the United States District Court for the District of Colorado is in charge of this case. The case is called PHT Holding I LLC v. Security Life of Denver Insurance Co., Case No. 1:18-cv-01897-DDD-SKC (D. Colo.). PHT Holding I LLC owns two SAUL policies that were subjected to the COI rate increase at issue in the case and is the Plaintiff and Court-appointed class representative in this case. The company it sued, Security Life, is called the Defendant.

The class action lawsuit alleges that Security Life of Denver Insurance Company ("Security Life") breached its contracts with certain Strategic Accumulator Universal Life ("SAUL") policy owners when in September 2015, Security Life announced that SAUL insurance policies would be subject to a cost of insurance (“COI”) rate scale increase. Plaintiff asserts the COI rate increase violated the terms of the policy holders’ contracts, and that Plaintiff and members of the Class have been damaged as a result. Specifically, Plaintiff alleged that Security Life breached the policy provision which states “Any change in rates will apply to all individuals of the same premium class and whose policies have been in effect for the same length of time.” Security Life denies Plaintiff’s claims and asserts multiple defenses, including that the challenged action is permitted by the contract terms, lawful, justified, and has not harmed Plaintiff or caused any damages. The Court has not decided who is right or wrong. Instead, both sides have agreed to the Settlement to avoid the risks, costs, and delays of further litigation, so that people affected will get a chance to receive compensation.

The marketing name of the policies subject to the COI rate increase in September 2015 is Strategic Accumulator Universal Life or Strategic Accumulator UL. The SAUL policies that were subject to the COI rates scale increase were issued between 2003 and March 2006.

In a class action, a person(s) or entity(ies) called a “Class Representative(s)” sues on behalf of all individuals who have a similar claim. Here, PHT Holding I LLC, represents other eligible SAUL policy owners and together they are called the “Class” or “Class Members.” Bringing a case, such as this one, as a class action allows resolution of many similar claims of persons and entities that might be economically too small to bring in individual actions. One court resolves the issues for all class members, except for those who validly exclude themselves from the class.

In the Court’s Order certifying the Class, the Court decided that the settlement of the breach of contract claim against Security Life in this lawsuit can proceed as a class action because, at that point of the lawsuit, it met the requirements of Rule 23 of the Federal Rules of Civil Procedure, which governs class actions in federal court. The Court found that:

• There are numerous Class Members whose interests will be affected by this lawsuit;
• There are legal questions and facts that are common to each of them;
• The Class Representative’s claims are typical of the claims of the rest of the Class;
• The Class Representative and the lawyers representing the Class will fairly and adequately represent the interests of the Class;
• A class action would be a fair, efficient and superior way to resolve this lawsuit;
• The common legal questions and facts predominate over questions that affect only individual Class Members; and
• The Class is ascertainable because it is defined by identifiable objective criteria.

In certifying the Class, the Court appointed Susman Godfrey LLP as Class Counsel. For more information, visit the Important Documents page on this website.

Security Life denies any and all liability or wrongdoing of any sort with regard to the 2015 COI rate increase. Trial was scheduled to start on February 13, 2023. Two days before trial, the parties reached a settlement in principle, which was subsequently memorialized in the Settlement Agreement, in order to avoid the risks, costs, and delays of further litigation. The Court has not decided in favor of Plaintiff or Defendant. Plaintiff and Class Counsel think the Settlement is in the best interests of the Class and is fair, reasonable, and adequate.

The Class consists of all owners of SAUL policies subjected to Security Life’s COI rate increase announced in September 2015.

Yes. Excluded from the Class are owners of SAUL policies subjected to the COI rate increase whose policies were issued in Alaska, Arkansas, New Mexico, Virginia, and Washington, and Security Life, its officers and directors, members of their immediate families, and their heirs, successors, or assigns.

If you are still not sure whether you are a Class Member, please call the Settlement Administrator toll-free at 1-833-667-1230, or write to:

Security Life COI Life Insurance Settlement
c/o JND Legal Administration
P.O. Box 91225
Seattle, WA 98111

A Settlement Fund of $30 million will be established for Class Members. After payment of the cost to administer the Settlement Fund as well as attorneys’ fees and expenses and the payments to the Class Representative (see FAQ 14), the Settlement Administrator will distribute the remaining amounts to Class Members in proportion to their share of the overall COI overcharges collected from the Class through December 30, 2022, with a minimum cash payment to each Class Member of $100.00. No portion of the Settlement Fund will be returned to Security Life.

Security Life has also agreed not to:

• Raise COI rate scales on policies covered by the Settlement for a period of five years from the date of the Settlement Agreement. In other words, Security Life is prohibited from imposing another COI rate scale increase on the policies in the class until March 31, 2028, at the earliest.
• Cancel, void, rescind, or deny a death claim submitted under the Class Members’ policies or contest the validity of a policy based on
  • An alleged lack of valid insurable interest under any applicable law or equitable principles; or
  • Any misrepresentation allegedly made on or related to the application for, or otherwise made in applying for the policy

More details are in a document called the Settlement Agreement, which is available on the Important Documents page.

If you are a Class Member, you cannot sue, continue to sue, or be part of any other lawsuit against Security Life about the facts that arise from the same factual predicate of the claims released in this Settlement. It also means that all the decisions by the Court will bind you. The Released Claims and Released Parties are defined in the Settlement Agreement. They describe the legal claims that you give up if you stay in the Settlement. The Settlement Agreement is available on the Important Documents page.

You will automatically receive a payment in the mail if you are entitled to one. No claims need to be filed.

Payments will be mailed to Class Members after the Court grants “final approval” of the Settlement and after all appeals are resolved. If the Court approves the Settlement, there may be appeals. It is always uncertain whether these appeals can be resolved and resolving them can take time. Please be patient.

Yes. The Court has appointed the following lawyers as “Class Counsel.”

The Court will determine how much Class Counsel will be paid for fees and expenses. Class Counsel will file a motion seeking an award for attorneys’ fees not to exceed 33 1/3% the Final Settlement Fund (i.e., $10,000,000.00). In addition to seeking an award for attorneys’ fees, Class Counsel will seek reimbursement for expenses incurred or to be incurred in connection with the Settlement, as well as an Incentive Award up to $35,000 for Plaintiff for its service as the representative on behalf of the Class, to be paid from the Final Settlement Fund. You will not be responsible for direct payment of any of these fees, expenses, or awards.

You do not need to hire your own lawyer to pursue the claims against Security Life because Class Counsel is working on behalf of the Class. However, if you want to be represented by your own lawyer, you may hire one at your own expense and cost.

Any Class Member may object to the fairness, reasonableness, or adequacy of the proposed Settlement. Class Members who wish to object to any term of the Settlement must do so, in writing, by filing a written objection with the Court, and serving copies on Class Counsel and Counsel for Defendant. The written objection must include:

• Your full name, address, telephone number, and email address (if any);
• The case name (PHT Holding I LLC  v. Security Life of Denver Insurance Co.);
• The policy number(s);
• A written statement of all grounds for the objection accompanied by any legal support for the objection (if any);
• Copies of any papers, briefs, or other documents upon which the objection is based;
• A list of all persons who will be called to testify in support of the objection (if any);
• A statement of whether you intend to appear at the Fairness Hearing; and
• Your or your counsel’s signature

If you intend to appear at the Fairness Hearing through counsel, the written objection must also state the identity of all attorneys representing you who will appear at the Fairness Hearing. Your objection, along with any supporting material you wish to submit, must be filed with the Office of the Court, with a copy served on Class Counsel and Counsel for Defendant by July 3, 2023 at the following addresses:

The Court will hold a Fairness Hearing on September 13, 2023 at 2:30 MT at the United States District Court for the District of Colorado, Alfred A. Arraj United States Courthouse, 901 19th Street, Denver, CO, 80294. At the Fairness Hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. The Court will also consider how much to pay and reimburse Class Counsel and any Incentive Award payment to Plaintiff. If there are objections, the Court will consider them at this time. We do not know how long these decisions will take.

No. But you or your own lawyer may attend at your expense. If you submit an objection, you do not have to come to Court to talk about it. As long as you filed and served your written objection on time to the proper addresses, the Court will consider it.

Yes. You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter saying that it is your “Notice of Intent to Appear.” Your request must state your name, address, and telephone number, as well as the name, address, and telephone number of the person that will appear on your behalf. Your request must be filed with the Clerk of the Court and served on Class Counsel and Defendant’s Counsel no later than July 3, 2023. See FAQ 16 for addresses.

Those who are eligible to receive a payment from the Settlement do not need to do anything to receive payment; you will automatically receive a payment from the Settlement. You will be bound by the Settlement, and you will give up your right to sue or continue to sue Security Life for the claims in this case.

The Notice summarizes the proposed Settlement. More details are in the Settlement Agreement, available at the Important Documents page. You can also call the Settlement Administrator toll-free at 1-833-667-1230, or write to:

Security Life COI Life Insurance Settlement
c/o JND Legal Administration
P.O. Box 91225
Seattle, WA 98111