Massachusetts Mutual Life Insurance v. Superior Court

Summary

By way of its petition for extraordinary relief defendant Massachusetts Mutual Life Insurance Company (Mass Mutual) challenges the trial court’s order certifying as a plaintiffs’ class 33,000 people who, over a course of 15 years, purchased a particular type of life insurance product from Mass Mutual. We issued an order to show cause and have received a response from the plaintiffs and real parties in interest.

The product the plaintiffs purchased not only provided insurance coverage and a guaranteed return on accumulated premium, but also permitted plaintiffs to share in dividends which the company declared on a discretionary basis. In theory and as suggested by Mass Mutual’s agents in sales presentations, over time the principal amount of accumulated premiums would be large enough so that the amount of the discretionary dividend would pay the annual premium due on the policy. In the insurance industry these products are genetically referred to as “vanishing premium” policies. Mass Mutual offered its customers what it called an N-Pay premium payment plan.

Plaintiffs contend that at the time they purchased policies Mass Mutual was paying a discretionary…