Globe Life fraud claims; AAA agents file lawsuit: Law and legal news

April 15, 2024 5:00 PM

A house of wooden blocks, one reads insurance.

Enjoy complimentary access to top ideas and insights — selected by our editors.

Digital Insurance reviews a high volume of news leads every week for this and other stories. Please send press releases and other information to kaitlyn.mattson@arizent.com.

The Maryland Chamber of Commerce and the American Property Casualty Insurance Association (APCIA) voiced strong opposition to Senate Bill 538, which would increase the cap on non-economic damages in personal injury and wrongful death lawsuits in Maryland. The current cap, $935,000, would increase by 90% through the bill, bringing the cap to $1.75 million and raising the annual escalator adjustment from $15,000 to $20,000.

Opposition for this legislation argues that long-term impacts include increased insurance rates due to higher liability risks, which would lead insurance organizations to raise prices and cut costs, like employee wages, or even leave the state. Larger lawsuit payouts would also increase the risk for insurance companies, raising costs for insurance customers.

Ten former American Automobile Association of Northern California, Nevada and Utah, agents filed a lawsuit in Contra Costa County, California against the company for age and race discrimination, wrongful termination and other charges. Attorney Gary Gwilliam of Gwilliam Ivary Chiosso Cavalli & Brewer, the lead attorney representing the terminated agents, said in a statement: "In our complaint we allege that AAA systematically targeted and then wrongfully terminated our clients without cause and have done the same thing to scores of other AAA agents as a way to aggressively improve their bottom line at a time of record profits for AAA."

Globe Life, a life insurance company, is being investigated for alleged fraud-related activities after Fuzzy Panda Research published a report, Globe Life Executives Disregarded Wide-Ranging 'Insurance Fraud' While They Received Millions in Undisclosed Kick-Back Scheme. The report suggests that Globe Life executives ran a $43 million bribery and kickback scheme.

Globe Life released a statement: "We are disappointed today to see self-motivated short sellers push inflammatory allegations in order to drive down Globe Life's stock price. We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements. The motivations behind this short seller's report are driven solely by short-term profit earned on the backs of the thousands of shareholders, hardworking employees, independent contractor sales agents and customers who know and trust our brand and strong track record. We have successfully defended ourselves against these types of claims. The short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory. Globe Life intends to explore all means of legal recourse against the parties responsible."

New legislation in Florida will protect consumers from dishonest towing companies. HB 179 was supported by the National Insurance Crime Bureau. The law will require reasonable towing and storage fees and that towers accept additional payment methods from consumers and extend the time a consumer can recover their vehicle before it's sold off.

A case in New Mexico ruled in favor of insurer AIG/National Union. The claim was related to bad-faith and unfair-insurance-practices arising from a wrongful death action. The plaintiff who was found at fault for an accident involving a commercial interstate tractor-trailer had been driving without a valid license. A jury ruled unanimously in favor of AIG/National Union. The case is Eden v. National Union Fire Ins. Co. of Pittsburgh.