Protective and West Coast Life Settle $80M CA Life Insurance Lapse Suit

Protective Life Insurance Co. and West Coast Life Insurance Co. have agreed to an $80 million class action settlement related to policies that lapsed due to nonpayment of premiums in California between January 1, 2013, and April 22, 2025. This settlement resolves allegations that the companies did not adhere to California Insurance Code Sections 10113.71 and 10113.72, which require certain notifications and procedures before policy termination. Specifically, these statutes mandate a 60-day grace period, advance lapse notices, and the option for policyholders to designate a third party to receive such notices. The settlement fund will provide monetary relief or policy reinstatement to eligible class members, with payments capped at 70% of the death benefit amount. Claims can be submitted online or by mail to a settlement administrator, with payments issued via paper checks once the court approves the settlement and any appeals are settled. While the companies deny wrongdoing, they settled to mitigate the risks and expenses associated with litigation. This case highlights the importance of compliance with state-specific insurance regulatory requirements and demonstrates potential financial exposure insurers face when procedural mandates are not strictly followed. The settlement also underscores the value of monitoring class action developments to identify eligible claims within the insurance market.