Halcom, et al. v. Genworth Life Insurance Company, et al.

On January 11, 2021, four individuals with Genworth Life Insurance Company and Genworth Life Insurance Company of New York (“Genworth”) PCS I or PCS II long-term care insurance policies, Judy Halcom, Hugh Penson, Harold Cherry, and Richard Landino (“Named Plaintiffs”), filed a Class Action Complaint (“Complaint”) against Genworth in the United States District Court for the Eastern District of Virginia, alleging that Genworth withheld material information from Policyholders relating to the full scope and magnitude of Genworth’s future rate increase plans and to Genworth’s reliance on obtaining such rate increases to be able to pay future claims. That Complaint asserted claims for fraudulent inducement by omission and for declaratory relief.

The “Class” or “Class Members” for purposes of this settlement are defined as follows, with capitalized terms defined below:

All Policyholders of Genworth long-term care insurance PCS I and PCS II policies, and State variations of those policies in force at any time during the Class Period and issued in any of the fifty (50) States of the United States or the District of Columbia (the “States”), excluding: (1) those Policyholders with Class Policies that went into Non-Forfeiture Status or entered a Fully Paid-Up Status prior to January 1, 2014; (2) those Policyholders whose Class Policies are Lapsed and outside any period Genworth allows for automatic reinstatement upon payment of past due premium, or whose Class Policy has otherwise Terminated as of the date of the Class Notice or as of the date of the Special Election Letter would otherwise be mailed to the Policyholder; (3) those Policyholders who are deceased before their signed Special Election Option is postmarked for mailing to Genworth, or is faxed or emailed to Genworth; (4) Genworth’s current officers, directors, and employees as of the date Class Notice is mailed; and (5) Judge Robert E. Payne and his immediate family and staff.

Changes to your policy status or coverage (including, for example, whether your policy Lapses or is Terminated) may impact whether or not you are a member of the proposed Class. If your policy Lapses, it must be reinstated within the period that Genworth allows your Class Policy to be automatically reinstated if you wish to exercise rights and options in the settlement.

The following defined terms apply to the definition “Class” or “Class Members”:

“Policyholder(s)” means the policy owner, except: (a) where a single policy or certificate insures both a policy or certificate owner and another insured person, “Policyholder(s)” means both the policy or certificate owner and the other insured person jointly, and (b) where the Class Policy at issue is certificate 7000X, 7020X, 7000Y, 7030CRT, 7031CRT, or 7032CRT, or any other Class Policy that is a certificate issued under a group long-term care insurance policy, “Policyholder(s)” means the certificate holder.

“Class Period” means any time on or between January 1, 2012 and the date the Class Notice is mailed.

“Class Policies” means Genworth long-term care insurance policies, or, for group policies, certificate forms identified here in force at any time during the Class Period and issued in any of the States.

“Non-Forfeiture Status” means a policy status where the Policyholder has exercised a “Non-Forfeiture Option.” “Non-Forfeiture Options” include, but are not limited to, benefits that may have been made available pursuant to: an optional Non-Forfeiture Benefit Rider, the Limited Benefits Upon Lapse Due to a Substantial Premium Increase (also called a Contingent Non-Forfeiture Benefit), the Limited Non-Forfeiture Option; the Optional Limited Benefit Endorsement; or the Limited Benefit with Payment for Partial Policy Disposition.

“Fully Paid-Up Status” means a status whereby a Class Policy is continued in full force and effect and no further premiums are owed. A Class Policy in Fully Paid-Up Status does not include a Class Policy that is in a Non-Forfeiture Status.

“Lapse” or “Lapsed” means a status whereby a policy is no longer in force because premium was not paid as required. A Lapsed policy Terminates and cannot be reinstated if it is outside any period Genworth allows for the policy to be automatically reinstated with payment of past due premium. For purposes of the Settlement Agreement, a policy in Non-Forfeiture Status is not a Lapsed policy.

“Special Election Letter” means the letter Genworth will send to all Class Members providing certain disclosures and offering settlement options that will be available to each Class Member.

“Special Election Options” means the options offered to Class Members that may include, where available, Class Members maintaining their current benefits at their existing filed rates (subject to any and all future rate increases that may be approved or otherwise permitted) or electing from a selection of paid-up reduced benefit options and/or reduced benefit options (also subject to any and all future rate increases that may be approved or otherwise permitted) as described in Appendix C of the Settlement Agreement, some of which also entitle Class Members to damages payments.

“Terminated” means a status whereby a Class Policy is no longer in force and is unable to be automatically reinstated by the Policyholder with payment of past due premium. It includes, for example, a Class Policy that has Lapsed beyond the period permitted for automatic reinstatement, a Class Policy that has been cancelled, or a Class Policy (including a policy in Non-Forfeiture Status) that is no longer in force because all available benefits have been exhausted.

The Settlement Agreement is conditioned upon the Court entering an order granting final approval of the Settlement Agreement as fair, reasonable, and adequate and in the best interests of the Class. Subject to the Settlement Agreement becoming final, the terms of the Settlement Agreement are as follows:

1. Special Election Disclosures and Options: In consideration for a Release as described in paragraph 2 below, and as a direct result of the Class Action and the Settlement Agreement, Genworth will send a special election letter (“Special Election Letter”) to all Class Members after the settlement has been finally approved. The Special Election Letter will contain, subject to approval by the Court and being approved by and/or not objected to by state insurance regulators:
   1. Disclosure of certain information about GLIC’s and/or GLICNY’s future rate increase plans and need for future rate increases (the “Disclosures”); and
   2. Class Members’ right to make an election of either (1) maintaining current benefits at existing filed rates (subject to future approved rate increases), or (2) electing from a selection of reduced paid-up benefit options or reduced benefit options (the “Special Election Options”), subject to the availability of those options depending on each Class Members’ current policy terms and benefits and any state limitations concerning Partnership Plan (“Partnership Plan”) requirements. Special Election Options that may be available could increase the amount of your current non-forfeiture paid-up benefit or entitle you to cash damages pay-outs. The actual Special Election Options available to you will depend upon many factors including, but not limited to, your current policy status and benefits, final Court approval, and state regulatory review and comment.

2. Release: Each member of the Class who does not timely and validly opt out of the Class, will fully and irrevocably waive and release Genworth and each of those entities’ respective affiliates, predecessors, successors, parents, subsidiaries, and, for each of the foregoing, their current, former, and future directors, officers, direct and indirect owners, members, managers, attorneys, representatives, employees, and agents (the “Genworth Released Parties”) of and from any and all known or unknown, contingent or absolute, matured or unmatured, suspected or unsuspected, disclosed or undisclosed, foreseeable or unforeseeable, liquidated or unliquidated, existing or arising in the future, and accrued or unaccrued claims, demands, interest, penalties, fines, and causes of action, that the Named Plaintiffs and Class Members may have from the beginning of time through and including the final settlement date that relate to claims alleged, or that have a reasonable connection with any matter of fact set forth in the Class Action including, but not limited to, any claims relating to rate increases on Class Policies. This Release specifically includes any legal or equitable claim arising from or related to any election or policy change made or not made by any Class Members to his or her policy benefits prior to the final settlement date. Named Plaintiffs and Class Members will further release the Genworth Released Parties and Class Counsel from any future claims, on any legal or equitable basis, relating to or arising out of the Special Election Options and/or statements and representations provided in connection with the Special Election Options including (but not limited to) any claim specifically relating to any decision, or non-decision, to maintain, modify, or give up coverage.

   This Release will not prevent a Class Member from making a claim for benefits under his or her long-term care insurance policy consistent with his or her policy coverage, nor shall it include a Class Member’s challenge or appeal of Genworth’s denial of benefits under his or her Class Policy.

   This website only contains a summary of the actual benefits and release language contained in the Settlement Agreement, which is on file with the Court and available for your review, including on the Important Documents page of this website. If the Settlement Agreement is not approved by the Court or does not become final for any reason, the Class Action will continue, this Release will not be binding, and the Special Election Options will not be available.

3. Attorneys’ Fees and Litigation Expenses: As part of the request for final approval of the Settlement Agreement, Class Counsel will file a request seeking to be paid the following:
   1. $1,000,000.00 relating to the injunctive relief that is in the form of the Disclosures.
   2. An additional contingent payment of 15% of certain amounts related to Special Election Options selected by the Class, which shall be no greater in the aggregate than $18,500,000.00. None of the attorneys’ fees will be deducted from payments made by Genworth to Class Members.

   Class Counsel will also file a request for an award of reasonable litigation expenses in this case. These expenses will be no more than $50,000.00.

   These are the only attorneys’ fees and litigation expenses that Class Counsel will be paid as a result of the settlement. Class Members will not be required to separately pay Class Counsel for any other attorneys’ fees or expenses. Genworth has agreed to pay all fees and expenses separately. The actual amounts of attorneys’ fees and litigation expenses to be paid to Class Counsel will be determined by the Court, and these amounts will be paid by Genworth directly to Class Counsel.

   This website only contains a summary of the actual attorneys’ fees and litigation expenses provisions contained in the Settlement Agreement, which is on file with the Court and available for your review, including on the Important Documents page of this website.

4. Class Representatives’ Service Payment: Named Plaintiffs Judy Halcom, Hugh Penson, Harold Cherry, and Richard Landino have been appointed as class representatives by the Court. As part of the request for Final Approval of the Settlement Agreement, Class Counsel will request that service payments be awarded to each class representative in an amount of up to $15,000.00 for each of them for the time, work, and risk they undertook in bringing this Class Action and achieving a settlement on behalf of all Class Members. None of the service payments approved by the Court will be deducted from payments made by Genworth to Class Members.

All Parties believe in the merits of their respective claims and defenses. Nevertheless, due to the uncertainties, risks, expenses, and business disruption of continued litigation, the Parties have agreed to settle the lawsuit after voluntary mediation proceedings involving an independent mediator. The Parties have entered into a Joint Stipulation of Class Action Settlement and Release (the “Settlement Agreement”), which the Court has preliminarily approved as fair and reasonable. The principal terms of the Settlement Agreement are summarized on this website. The full Settlement Agreement is on file with the Court and available on the Important Documents page of this website.

The attorneys for Named Plaintiffs Judy Halcom, Hugh Penson, Harold Cherry, and Richard Landino have been designated by the Court as “Class Counsel” to represent all Class Members affected by the Settlement Agreement. Class Counsel believes that the Settlement Agreement is fair, reasonable, and adequate and in the best interests of the Class Members.

Genworth denies any wrongdoing or legal liability for any alleged wrongdoing in connection with any facts or claims that have been or could have been alleged in Named Plaintiffs’ lawsuit, whether on behalf of the Named Plaintiffs or Class Members. Genworth contends that neither Named Plaintiffs nor the putative Class has been injured or is entitled to any relief. The Court has not ruled on the merits of the claims or defenses. The parties have voluntarily entered into this Settlement Agreement without any finding of wrongdoing or liability against Genworth.

If you do not oppose the settlement of the lawsuit, then simply do nothing. You do not need to return an opt-out letter and do not need to send any documents to the Settlement Administrator. IF YOU DO NOTHING AND YOU MEET THE CLASS DEFINITION, YOU WILL BE BOUND BY THE TERMS OF THE SETTLEMENT, INCLUDING THE RELEASE. If you do nothing, you will not have the right to pursue your own action for the claims covered by the Class Action Release. If the Settlement Agreement is approved by the Court, you may then be sent another correspondence with options to elect to receive benefits in the Settlement Agreement.

If you do NOT want to be bound by the Settlement Agreement and wish to retain the right to proceed against GLIC and/or GLICNY on your own as to the claims that were alleged, or that have a reasonable connection with any matter of fact set forth in the Class Action, subject to any defenses that may be available to GLIC and/or GLICNY to any claims you may have, including, but not limited to, statutes of limitation and statutes of repose, then you must notify the Settlement Administrator that you wish to exclude yourself from the Settlement Agreement and the Class.

To do so, you must send a signed letter to the Settlement Administrator, which includes: (1) your name, (2) your address, (3) if available, your policy number, (4) a statement that you are “requesting exclusion” from the Settlement Agreement, (5) the name of the case and case number (Halcom, et al. v. Genworth Life Insurance Company, et al., Case No. 3:21-cv-00019-REP), and (6) your signature.

Opt-out letters can be mailed to the Settlement Administrator at the following mailing address: Halcom v. Genworth Settlement Administrator, P.O. Box 5749, Portland, OR 97228-5749.

The letter requesting exclusion must be postmarked no later than December 28, 2021. Any request for exclusion received with a postmark after that date will be invalid.

IF YOU CHOOSE TO EXCLUDE YOURSELF, YOU WILL NOT RECEIVE THE SETTLEMENT AGREEMENT POLICY ELECTION OPTIONS OR OTHER RELIEF AND THE TERMS OF THE SETTLEMENT WILL NOT APPLY TO YOU.

If you want to remain in the Settlement Agreement and be bound by its terms, but you oppose any aspect of the Settlement Agreement, or Class Counsel’s application for an award of fees and expenses, you may object to the Settlement Agreement.

In order to object, you must file a written Objection with the Clerk of United States District Court for the Eastern District of Virginia, located at 701 East Broad Street, Richmond, VA 23219, and you must serve a copy of the written Objection on the Settlement Administrator at the following address: Halcom v. Genworth Settlement Administrator, P.O. Box 5749, Portland, OR 97228-5749.

A written Objection must include: (1) your full name, (2) your current address, (3) the name of the case and the case number (Halcom, et al. v. Genworth Life Insurance Company, et al., Case No. 3:21-cv-00019-REP), (4) the basis or reason(s) for your objection(s), (5) your signature, and (6) if you (or someone on your behalf such as an attorney) intends to appear at the Final Approval Hearing, a statement stating that you (or someone on your behalf) intend to appear at the Final Approval Hearing.

Any written Objection must be filed with the Court and sent to the Settlement Administrator with a postmark no later than December 28, 2021. Any written Objection filed and/or mailed with a postmark after this deadline will be invalid.

You may be permitted to appear personally (or through an attorney) at the Final Approval Hearing to present your objections directly to the Court if you timely file and serve a written Objection and do not submit a request for exclusion. A written Objection must state whether you (or someone on your behalf, such as an attorney) intends to appear at the Final Approval Hearing. If you wish to have an attorney represent you in connection with any written Objection, including to appear at the Final Approval Hearing, you will be responsible for any fees or expenses of that attorney. If you submit a written Objection, you will remain a Class Member and, if the Court rejects your objection(s), you will still be bound by the terms of the Settlement Agreement, including the Release.

The Final Approval Hearing on the fairness and adequacy of the Settlement Agreement will be held on February 9, 2022, at 10:00 a.m. EST in Courtroom 7400 in The Spottswood W. Robinson III and Robert R. Merhige, Jr., Federal Courthouse, 701 East Broad Street, Richmond, VA 23219. You are not required to attend the Final Approval Hearing in order to participate in the Settlement Agreement, although you are free to do so if you choose. The Court, in its discretion, may continue the Final Approval Hearing to a later date, in which case no additional written notice will be sent to Class Members, so it is incumbent upon you to check the Court’s docket for this case and this website regarding the Final Approval Hearing date and time if you wish to attend.

The following law firms are Class Counsel and represent the Class Members:

The Settlement Administrator is Epiq. Epiq’s phone number is 1-800-664-4267. Epiq’s mailing address is:

Halcom v. Genworth
Settlement Administrator
P.O. Box 5749
Portland, OR 97228-5749

The Special Election Options described on this website require final approval by the Court and are subject to review and modification by individual state insurance regulators.

You should also consider the following additional information, which may impact the availability of Special Election Options under the settlement:

1. If you currently have a long-term care policy with Genworth, you must continue to pay premiums (unless your premiums have been waived or your policy is in Fully Paid-Up Status) to keep your policy in force so that it is eligible for Special Election Options under the settlement. Your premiums also remain subject to any rate increases that may be approved or otherwise permitted.
2. Changes to your policy status or coverage (including Lapse or Termination) may impact whether or not you are in the proposed Class and/or whether Special Election Options will be available to you.
   1. If your policy lapses after the notice date, but is still in the period during which your policy can be automatically reinstated by paying any past-due premium, you will need to reinstate your policy by paying the past-due premium to exercise any rights and options under the settlement.
   2. If, before you are sent a Special Election Letter, your policy lapses and is outside any period Genworth allows for the policy to be automatically reinstated with payment of past due premium, or terminates for any other reason, then you will be excluded from the Settlement Class and the Special Election Options will not be available to you.
   3. If your policy Lapses after you have been sent a Special Election Letter and you do not pay past due-premiums within the time period allowed for automatic reinstatement or Terminates for any other reason, you will remain in the Class and release your claims, but you will no longer be eligible for the Special Election Options.
3. If you reduce your coverage, including in response to a rate increase on your policy, your reduction in coverage may affect the Special Election Options that otherwise may become available to you under the settlement. As a Policyholder, you have options to reduce your coverage that are separate from the Special Election Options that may become available to you under the settlement. For example, if there is a premium rate increase on your policy, you will have options for reducing your coverage. Those options will be different from any Special Election Options that may become available under the settlement and do not include the possibility of a cash damages payout. If you select an option to reduce your coverage separate from the Special Election Options that may be available under the settlement, you may eliminate or reduce the availability of any future Special Election Options or the value of any corresponding cash damages payments that may be available. Whether one of these options or any Special Election Option will best meet your needs will depend on your specific circumstances.