You have a right to know about a proposed Settlement and your rights and options before the Court decides whether to approve the Settlement.

Honorable Mary Kay Vyskocil of the United States District Court for the Southern District of New York (the “Court”) is in charge of this case. The case is called Advance Trust & Life Escrow Services, LTA and James Kenney v. PHL Variable Insurance Company, Case No. 18-CV-3444 (MKV). The individuals who originally sued are Plaintiffs ATLES and James Kenney. ATLES subsequently dismissed its claims without prejudice and the action continues to be prosecuted by the remaining plaintiff Mr. Kenney. The company sued, PHL, is called the Defendant.

The class action lawsuit alleges that PHL breached its contracts with certain policy owners. Starting in August 2017, certain policy owners were issued letters announcing that certain PAUL and PEL policies would be subject to a new COI rate increase. Plaintiff asserts those COI rate increases violated the terms of the policy holders’ contracts, and that Plaintiff and members of the Class have been damaged as a result. PHL denies Plaintiff’s claims; however, both sides have agreed to the Settlement to avoid the risks, costs, and delays of further litigation, including an appeal, so that people affected will get a chance to receive compensation.

This lawsuit does not implicate the COI rate increase announced on or around November 2, 2020. That increase (the “2021 Increase”), effective beginning on each policy’s first policy anniversary date falling on or after January 1, 2021, is subject to separate litigation in Kenney v. PHL Variable Insurance Company, Case No. 3:22-cv-00552 (OAW), currently pending in the United States District Court for the District of Connecticut. The proposed Settlement specifically excludes all claims related to the 2021 Increase as well as any claims related to future COI rate scale increases, or changes to any other policy charges and credits, imposed after December 31, 2020.

The Settlement Class consists of all owners of PAUL or PEL policies issued by PHL that experienced an increase to the COI rate scales between (i) November 5, 2017 and (ii) the monthly deduction immediately preceding the policy’s first policy anniversary date falling on or after January 1, 2021. Excluded from the Settlement Class are the Excluded Policies (See below); Class Counsel and their employees; PHL, its officers and directors, members of their immediate families, and the heirs, successors or assigns of any of the foregoing; and the Court, the Court’s staff, and their immediate families.

Excluded Policies include Policy Nos. 97523677 and 97523828, which are owned by Conestoga Trust and Conestoga Trust Services, LLC and subject to separate pending litigation against PHL; and the policies listed in the chart below, which are subject to prior settlement agreements. To the extent an owner owns both Class Policy(ies) and Excluded Policy(ies), the owner is included in the Class with respect to the Class Policy(ies), but not with respect to any Excluded Policy(ies).

In a class action, a person(s) or entity(ies) called a “Class Representative(s)” sues on behalf of all individuals who have a similar claim. Here, Plaintiff James Kenney represents other eligible PAUL and PEL policy owners and together they are called the “Class” or “Class Members.” Plaintiff James Kenney will serve as Class Representative. Bringing a case, such as this one, as a class action allows resolution of many similar claims of persons and entities that might be economically too small to bring in individual actions. One court resolves the issues for all class members, except for those who validly exclude themselves from the class.

In the Court’s Order Preliminarily Approving Class Action Settlement, the Court decided that the settlement of the breach of contract claim against PHL in this lawsuit can proceed as a class action because, at that point of the lawsuit, it met the requirements of Rule 23 of the Federal Rules of Civil Procedure, which governs class actions in federal court. The Court found that:

• There are numerous Class Members whose interests will be affected by this lawsuit;
• There are legal questions and facts that are common to each of them;
• The Class Representative’s claims are typical of the claims of the rest of the Class;
• The Class Representative and the lawyers representing the Class will fairly and adequately represent the interests of the Class;
• A class action would be a fair, efficient and superior way to resolve this lawsuit;
• The common legal questions and facts predominate over questions that affect only individual Class Members; and
• The Class is ascertainable because it is defined by identifiable objective criteria.

In certifying the Class, the Court appointed Susman Godfrey LLP as Class Counsel. For more information, visit the Important Documents page.

PHL denies any and all liability or wrongdoing of any sort with regard to the 2017 COI rate increase. Instead, the parties with the assistance of an experienced mediator, Eric Green, Esq., with Resolutions, LLC, have agreed to the Settlement. The parties want to avoid the risks, costs, and delays of further litigation. The Court has not decided in favor of the Plaintiff or the Defendant. Plaintiff and Class Counsel think the Settlement is in the best interests of the Settlement Class and is fair, reasonable, and adequate.

The Settlement Class consists of all owners of PAUL or PEL policies issued by PHL that experienced an increase to the COI rate scales between (i) November 5, 2017 and (ii) the monthly deduction immediately preceding the policy’s first policy anniversary date falling on or after January 1, 2021. See FAQs 3 and 8 for more information.

Yes. Excluded from the Settlement Class are the Excluded Policies that can be found in Section 3 of the Notice, a copy of which is available here. Class Counsel and their employees; PHL, its officers and directors, members of their immediate families, and the heirs, successors or assigns of any of the foregoing; and the Court, the Court’s staff, and their immediate families.

In addition, policy owners have an opportunity to request exclusion from the Settlement, as described below. Policy owners that timely and validly request exclusion will not be part of the Settlement Class and will not be entitled to any of its benefits.

An individual or entity that is the Owner of multiple policies in the Settlement Class cannot exclude less than all of the Owner’s policies from the Settlement Class. If a representative owner (such as a securities intermediary or trustee) owns multiple policies on behalf of different principals, that owner may stay in or Opt-Out of the Settlement Class separately for each policy.

If you are still not sure whether you are a Settlement Class Member, please visit call the Settlement Administrator toll-free at 1-877-871-0905, or write to: PHL Variable Life COI Settlement Administrator, c/o JND Legal Administration, P.O. Box 91420, Seattle, WA 98111.

A Settlement Fund of $18.5 million will be established for Settlement Class Members. The Settlement Fund will be reduced proportionally if there are any Opt-Outs from the Settlement Class. After payment of the cost to administer the Settlement Fund as well as attorneys’ fees and expenses and the payments to the Class Representative (see Question 18 below), the Settlement Administrator will distribute the remaining amounts to Settlement Class Members on a pro-rata basis calculated by dividing that Class member’s COI overcharges by the total overcharges damages incurred by the Final Settlement Class Members. No portion of the Settlement Fund will be returned to PHL. In addition, up until February 17, 2025, PHL has also agreed not to:

• Raise the COI rates scales for the Class Policies above the current rate scales for PAUL 1, PAUL 2, PAUL 2C, PAUL 3, PAUL 3A, PAUL 3B, PAUL 3C, PAUL 4, PAUL 4A, PEL 2, PEL 3, and PEL 3A that became effective on each policy’s first policy anniversary date falling on or after January 1, 2021, unless requested to do so by any Government Regulators. This obligation is referred to as the “COI Increase Moratorium.”

If by February 17, 2025, PHL reaches an agreement to not increase the COI rate scales on any Opt-Out Policies for a period ending later than February 17, 2025, PHL will extend the duration of the COI Increase Moratorium on the Settlement Class Policies to be as long as the settling Opt-Out Policies duration. Any agreement that would exempt any Opt-Out Policies from an additional COI rate scale increase, including any type of rebate, refund, or discount of an additional COI rate scale increase, will be treated as triggering this provision extending the COI Increase Moratorium. No party will have any rights under this provision until PHL actually implements an additional COI rate scale increase on the Settlement Class Policies.

• Take certain legal action or assert certain legal defenses challenging death claims for any Settlement Class Member.

More details are in a document called the Settlement Agreement, which is available on the Important Documents page

If you are a Settlement Class Member, unless you exclude yourself from the Settlement, you cannot sue, continue to sue, or be part of any other lawsuit against PHL about the facts that arise from the same factual predicate of the claims released in this Settlement. It also means that all the decisions by the Court will bind you. The Released Claims and Released Parties are defined in the Settlement Agreement. They describe the legal claims that you give up if you stay in the Settlement. The Settlement Agreement is available on the Important Documents page. The Released Claims do not include claims related to the 2021 Increase as well as any claims related to future COI rate scale increases, or changes to any other policy charges and credits, imposed after December 31, 2020.

You will automatically receive a payment in the mail if you are entitled to one. No claims need to be filed.

Payments will be mailed to Settlement Class Members after the Court grants “final approval” of the Settlement and after all appeals are resolved. If the Court approves the Settlement, there may be appeals. It is always uncertain whether these appeals can be resolved and resolving them can take time. Please be patient.

To exclude yourself (or “Opt-Out”) of the Settlement, you must complete and mail the Settlement Administrator a written request for exclusion. The exclusion request must include the following:

• Your full name, address, telephone number, and email address (if any);
• A statement that says that you want to be excluded from the Settlement Class;
• The case name (Advance Trust & Life Escrow Services, LTA and James Kenney v. PHL Variable Insurance Company);
• The policy number(s) to be excluded; and
• Your signature. You must mail your exclusion request postmarked by October 23, 2023 to:

PHL Variable Life COI Settlement Administrator
c/o JND Legal Administration
P.O. Box 91420
Seattle, WA 98111

If you own multiple Class Policies, your exclusion will be for all Class Policies owned. However, an Owner who owns multiple Class Policies in a representative or agency capacity (such as a trustee, securities intermediary, or other similar agency) for more than one principal, may request to exclude Class Policies from the Settlement held on behalf of one principal while participating in the Settlement with respect to Class Policies held by other principals.

IF YOU DO NOT EXCLUDE YOURSELF BY OCTOBER 23, 2023, YOU WILL REMAIN PART OF THE SETTLEMENT CLASS AND BE BOUND BY THE ORDERS OF THE COURT IN THIS LAWSUIT.

No. Unless you exclude yourself, you give up any right to sue PHL for the claims that this Settlement resolves. If you have a pending lawsuit, speak to your lawyer in that lawsuit immediately. You must exclude yourself from this Settlement to continue your own lawsuit. If you properly exclude yourself from the Settlement, you will not be bound by any orders or judgments entered in the Action relating to the Settlement.

No. You will not get any money from the Settlement if you exclude yourself.

Yes. The Court has appointed the following lawyers as “Class Counsel.”

The Court will determine how much Class Counsel will be paid for fees and expenses. Class Counsel will file a motion seeking an award for attorneys’ fees not to exceed 33 1/3% of the gross benefits provided to the Settlement Class, and reimbursement for all expenses incurred or to be incurred, payable only from the Final Settlement Fund. Class Counsel will also seek an Incentive Award up to $25,000 for Plaintiff James Kenney for his service as the representative on behalf of the Settlement Class, to be paid from the Final Settlement Fund. You will not be responsible for direct payment of any of these fees, expenses, or awards.

If you stay in the Settlement Class, you do not need to hire your own lawyer to pursue the claims against PHL. Class Counsel is working on behalf of the Settlement Class. However, if you want to be represented by your own lawyer, you may hire one at your own expense and cost.

Any Settlement Class Member who does not timely and properly opt out of the Settlement may object to the fairness, reasonableness, or adequacy of the proposed Settlement. Settlement Class Members who wish to object to any term of the Settlement must do so, in writing, by filing a written objection with the Court, and serving copies on Class Counsel and Counsel for Defendant. The written objection must include:

• Your full name, address, telephone number, and email address (if any);
• The case name (Advance Trust & Life Escrow Services, LTA and James Kenney v. PHL Variable Insurance Company);
• The policy number(s);
• A written statement of all grounds for the 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 statement of whether you intend to appear at the Fairness Hearing; and
• Your or your counsel’s signature.

If you intend to appear at the Fairness Hearing through counsel, the written objection must also state the identity of all attorneys representing you who will appear at the Fairness Hearing. Your objection, along with any supporting material you wish to submit, must be filed with the Office of the Court, with a copy served on Class Counsel and Counsel for Defendant by October 23, 2023 at the following addresses:
 

Objecting is simply telling the Court that you do not like something about the Settlement. You can object to the Settlement only if you do not exclude yourself from the Settlement. The purpose of an objection to the Settlement is to persuade the Court not to approve the proposed Settlement. A successful objection to the Settlement may mean that the objector and other members of the Class are not bound by the Settlement. Excluding yourself from the Settlement is telling the Court that you do not want to be part of the Settlement. If you exclude yourself from the Settlement, you have no basis to object to the Settlement because it no longer affects you.

The Court will hold a Fairness Hearing on December 19, 2023 at 10:00 a.m. ET at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, NY 10007-1312. At the Fairness Hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. The Court will also consider how much to pay and reimburse Class Counsel and any Incentive Award payment to Plaintiff. If there are objections, the Court will consider them at this time. After the hearing, the Court will decide whether to approve the Settlement. We do not know how long these decisions will take.

No. But you or your own lawyer may attend at your expense. If you submit an objection, you do not have to come to Court to talk about it. As long as you filed and served your written objection on time to the proper addresses, the Court will consider it.

Yes. You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter saying that it is your “Notice of Intent to Appear.” Your request must state your name, address, and telephone number, as well as the name, address, and telephone number of the person that will appear on your behalf. Your request must be filed with the Clerk of the Court and served on Class Counsel and Defendant’s Counsel no later than October 23, 2023.

Those who are eligible to receive a payment from the Settlement do not need to do anything to receive payment; you will automatically receive a payment from the Settlement. Unless you exclude yourself, you won’t be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against PHL about the legal issues that arise from the same factual predicate of this case, ever again.

This Notice summarizes the proposed Settlement. More details are in the Settlement Agreement, available on the Important Documents page. You can also call the Settlement Administrator toll-free at 1-877-871-0905, or write to:

PHL Variable Life COI Settlement Administrator
c/o JND Legal Administration
P.O. Box 91420
Seattle, WA 98111

PLEASE DO NOT CONTACT THE COURT