Frequently Asked Questions
This page provides the answers to class members’ most frequently asked questions.
The information provided is in summary form and is not intended as a complete explanation of your rights. For full and complete information, you are directed to review carefully the Court-Authorized Notice and the Settlement Agreement.
What is this lawsuit about?
This lawsuit is about whether USAA Life’s “cost of insurance” charges were consistent with the policy language in Universal Life 1, Universal Life 2, Universal 3, and Universal Life 4 life insurance policies (“Policies”). The Policies have a “cash value” that earns interest at or above a minimum rate guaranteed under the Policies. The Policies expressly authorize USAA Life to take a monthly deduction from the cash value to cover various charges.
Plaintiff alleges that USAA Life violated the Policies in three different ways. First, the Policies say that Cost of Insurance Rates are “based on the insured’s age, sex, and rate class,” and that “[c]urrent cost of insurance rates are based on [USAA Life’s] expectations as to future mortality experience.” Plaintiff alleges that USAA Life impermissibly used factors other than those identified in the Policies when setting Cost of Insurance Rates. Second, while the Policies permit a separate monthly Maintenance Charge, Administrative Charge, and/or Expense Charge, Plaintiff alleges that USAA Life exceeds the fixed amounts for these charges by considering its expenses when setting Cost of Insurance rates. Third, Plaintiff contends that, although USAA Life’s expectations as to future mortality experience have improved, it has failed to reduce Cost of Insurance Rates for the Policies.
USAA Life denies all of these claims and believes that all the rates and charges it applied to the Policies are, and always have been, consistent with the terms of the Policies.
Why is there a Settlement?
The Parties negotiated the Settlement with an understanding of the factual and legal issues that would affect the outcome of this lawsuit. During the lawsuit, Plaintiff, through his attorneys, thoroughly examined and investigated the facts and the law relating to the issues in this case.
Plaintiff believes that the final outcome of the lawsuit, if it were to proceed through trial and appeals, is uncertain. A settlement avoids the costs and risks of further litigation and provides immediate relief to the Settlement Class Members. Based on their evaluation of the facts and law, Plaintiff and his attorneys have determined that the proposed Settlement is fair, reasonable, and adequate. They have reached this conclusion based on the substantial benefits the Settlement provides to Settlement Class Members and the risks, uncertainties, and costs inherent in the lawsuit.
There has been no trial and there has been no final determination on the merits of the claims or defenses in this lawsuit. There will be no trial or final determination on the merits of the claims and defenses if the Court approves the Settlement. The Settlement does not indicate that USAA Life has done anything wrong, or that Plaintiff and the Settlement Class Members would win or lose if the lawsuit were to go to trial.
Who is included in the Settlement Class?
The Settlement Class includes all persons who own or owned Universal Life 1, Universal Life 2, Universal Life 3, and/or Universal Life 4 life insurance policies issued or administered by USAA Life, or its predecessors in interest, that were in force on or after March 1, 1999, subject to certain important exclusions (“Class Policy”). If someone who would otherwise be a Settlement Class Member is deceased, his or her estate is a Settlement Class Member.
Excluded from the Settlement Class are USAA Life; any entity in which USAA Life has a controlling interest; any of the officers, directors, or employees of USAA Life; the legal representatives, heirs, successors, and assigns of USAA Life; anyone employed with Plaintiff’s law firms; and any Judge to whom this case is assigned, and his or her immediate family. Also excluded from the Class are persons or entities who own or owned Universal Life 3 and Universal Life 4 policies issued in New Jersey and policies issued by USAA Life Insurance Company of New York. If you only own one or more excluded Policies, you are not a member of the Class. If you own both a Class Policy and an excluded Policy, you are a member of the Class but only with respect to the Class Policy.
What does the Settlement provide?
USAA Life has agreed to fund a cash Settlement Fund in the amount of $90 million, which will be used to pay (1) all payments to Settlement Class Members; (2) Class Counsel’s attorneys’ fees and expenses in an amount to be approved by the Court; (3) a service award to Plaintiff in an amount to be approved by the Court; and (4) the expenses incurred in administering the Settlement.
If the Court approves the Settlement, settlement checks will be mailed to Settlement Class Members in amounts that will vary according to a distribution plan. The distribution plan is designed to provide each Settlement Class Member an approximate pro rata portion of the Net Settlement Fund based on the amount of Cost of Insurance Charges paid by each Settlement Class Member. The distribution plan is attached to the Settlement Agreement as Exhibit B and is available on the settlement website. Settlement Class Members will receive a minimum payment of $50.
You should consult your own tax advisors about the tax consequences of the proposed Settlement, including any benefits you may receive and any tax reporting obligations you may have as a result.
How do I participate in the Settlement? Do I need to make a claim?
Settlement Class Members do not have to do anything to participate in the Settlement. No claims need to be filed. Upon approval of the Settlement, a settlement check will be sent to every Settlement Class Member in the amount determined by the Settlement Administrator. If someone who would otherwise be a Settlement Class Member is deceased, his or her estate is a Settlement Class Member.
When will I receive my settlement check?
The settlement checks will be sent to Settlement Class Members within 30 days after the Final Settlement Date. Settlement checks will be automatically mailed without any proof of claim or further action on the part of the Settlement Class Members.
Can I exclude myself from the Settlement?
Yes. If you don’t want a payment from the Settlement, and/or you want to keep the right to hire your own lawyer and sue USAA Life at your own expense about the issues in this case, then you may request to be excluded from the Settlement Class by sending a written notice to the Settlement Administrator. The notice must include the following information:
- The Settlement Class Member’s name (or the name of the entity that owns the Policy), current address, telephone number, and e-mail address;
- Policy number;
- A clear statement that the Settlement Class Member elects to be excluded from the Settlement Class and does not want to participate in the Settlement in Spegele v. USAA Life Insurance Company, Case No. 5:17-cv-967;
- The Settlement Class Member’s signature, or the signature of a person providing a valid power of attorney to act on behalf of the Settlement Class Member. If there are multiple owners of a Class Policy, all owners must sign the notice, unless the signatory submits a copy of a valid power of attorney to act on behalf of all then-current owners of the Policy.
Your written notice must be served on the Settlement Administrator by mailing it to Spegele v USAA, c/o Analytics Consulting LLC, P.O. Box 2007, Chanhassen, MN 55317-2007, postmarked no later than August 5, 2021.
How do I tell the Court if I do not like the Settlement?
You can object to the Settlement if you do not like some part of it. The Court will consider your views. To object to the Settlement, you must serve a written objection in the case, Spegele v. USAA Life Insurance Company, Case No. 5:17-cv-967. The objection must include the following information:
- The Settlement Class Member’s name (or the name of the entity that owns the Policy), current address, telephone number, and email address;
- Policy number;
- A written statement of all grounds for your 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);
- An indication of whether you intend to appear at the Fairness Hearing and the identity of all attorneys (if any) who will appear at the Settlement Hearing on your behalf;
- A statement whether the objection applies only to the objector, to a specific subset of the class, or to the entire class; and
- The signature of you or your counsel.
You must serve your objection on the Settlement Administrator by mailing it to Spegele v USAA, c/o Analytics Consulting LLC, P.O. Box 2007, Chanhassen, MN 55317-2007, postmarked no later than August 5, 2021.
When and where will the Court decide whether to approve the Settlement?
The Court will hold a hearing to decide whether to approve the Settlement and any requests for attorneys’ fees and expenses, a service award to Plaintiff, and the costs of settlement administration. You may attend and ask to speak, but you do not have to.
The Court will hold the hearing at 1:30 p.m. on August 26, 2021, at the United States District Court for the Western District of Texas, 655 E. Cesar E. Chavez Boulevard, San Antonio, Texas 78206. The hearing may be moved to a different date or time without additional notice being mailed to you, so it is a good idea to check this website for any updates. At the hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate and in the best interests of Settlement Class Members. If there are objections, the Court will consider them and will listen to people who have asked to speak at the hearing. After the hearing, the Court will decide whether to approve the Settlement. We do not know how long the Court’s decision will take.