The plaintiffs in this class action alleged that an insurance company had engaged in fraud and misrepresentation in its sales of a certain insurance product.
The plaintiffs in this class action alleged that an insurance company had engaged in fraud and misrepresentation in its sales of a certain insurance product. The plaintiffs’ experts claimed that the defendant foresaw or could have foreseen changes in economic factors that had an effect on the terms of insurance policies, and, as a result, the defendant should have informed prospective clients about these changes.
The court did not certify a class based on the fraud claims.
The defendant retained Dr. Michael Keeley, a senior vice president of Cornerstone Research, to evaluate the claims of the plaintiffs’ experts regarding how the terms of the insurance policies related to economic factors and whether changes in the terms of the policies caused by changes in economic factors could have been foreseen by the insurance company. Dr. Keeley explained that market efficiency prevented even the most sophisticated investors from systematically predicting future changes in the economic factors based on public information. Dr. Keeley’s empirical analysis showed that changes in the terms of the policies were not foreseeable. The court did not certify a class based on the fraud claims.