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Life Health > Long-Term Care Planning

Genworth Sued Over Notice Sent to Insured With Cognitive Impairment

By Allison Bell

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Genworth Financial faces a lawsuit in California over a notice sent to a customer with cognitive impairment.

Charissa Farley-Hay asserts that the Richmond, Virginia-based insurer confused Carol Ann McConnell, her 86-year-old mother, in 2021, when it sent McConnell a coverage option change form related to a 2019 long-term care insurance class-action settlement.

McConnell ended up losing her LTCI coverage. Use of the form and the policy termination amount to breach of contract, bad faith, an unfair business practice and financial abuse of an elder, according to a complaint filed last week in a state court in Palm Springs, California.

She is asking for compensatory damages, attorney’s fees, punitive damages and other damages.

Jonathan Dykstra, the attorney who is representing Farley-Hay and McConnell, declined to comment on the case. A representative for Genworth also declined to comment.

The coverage: McConnell is a Riverside County, California, resident who had a Genworth long-term care insurance policy with a $263,555.55 lifetime benefit and $883.70 in quarterly premiums.

Genworth settled a class-action lawsuit in Pennsylvania over LTCI representations in 2019.

As part of the settlement, Genworth was supposed to send class members disclosures about its intent to increase member premiums along with a coverage options change form, or “modified election form.”

The form: The modified election form McConnell received showed three actions she could take to eliminate, maintain or decrease her premiums in large, bold text — along with a note in small text, at the bottom of the form, that McConnell did not need to return the form if she wanted to keep her current coverage.

McConnell clearly would need all of her lifetime benefits, but she was confused by the form and chose to terminate her coverage, meaning that she would get only $74,547.78 in total lifetime benefits, according to the complaint.

Farley-Hay says in the complaint that she learned about the form and her mother’s choice in April of this year, when Genworth sent McConnell a letter stating that her benefits had ended.

Farley-Hay contends that Genworth knew, or should have known, that McConnell suffers from cognitive impairment.

According to the complaint, “Had Ms. McConnell not suffered from cognitive impairment, she never would have signed the modified election form.”

Credit: zolnierek/Adobe Stock

Allison Bell

Think_Allison

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