Oklahoma Lawsuit Over $15 Million Life insurance Policy Premium Financing Plan Settled

An Oklahoma lawsuit over a premium financing plan involving a $15 million Life insurance policy has finally come to a close with a settlement being reached. The lawsuit, filed by Tom D. Le and Trang H. Nguyen against PacLife, Arvest Bank, and advisor Kory Allsop, has been a topic of discussion since March 2023.

Initially, PacLife denied all claims made by Le and Nguyen, stating that “the policy speaks for itself.” However, District Court Judge Doug Drummond granted PacLife’s motion to dismiss in June, prompting an amended complaint to be filed a month later. In a September ruling, Drummond allowed fraud and negligence claims against PacLife to proceed, albeit labeling the allegations as “razor thin.”

The case took an interesting turn when the Oklahoma State Courts Network reported that a settlement had been reached earlier this month, with paperwork expected to be filed by June 1. This development comes amidst a backdrop of major carriers suspending premium financing deals due to criticism that the deals are too complex and often fail to meet financial projections.

Nguyen, a doctor in Tulsa, and her husband, who have “accumulated substantial assets for many years,” were approached by Allsop and Arvest in June 2021 with a plan to purchase a $15 million PacLife Indexed Estate Preserver 3 life policy for a premium payment of $2 million. The couple initially declined due to their conservative nature but later agreed to a joint financing plan proposed by Allsop and Arvest.

The plan involved the formation of a Life insurance Trust to own the policy, with the first 10 years of premiums financed through an Arvest Bank line of credit. The plaintiffs were assured that after year 15, they would have a fully paid-up $15 million policy with no further financial risk.

However, discrepancies arose regarding the premium payments and the understanding of the agreements. Allsop maintained that the plaintiffs were shown illustrations and the plan was thoroughly discussed in multiple meetings. He suggested that the plaintiffs’ dissatisfaction with the premium payments led them to attempt to rescind the agreements.

The settlement of this lawsuit brings closure to a complex and contentious legal battle, shedding light on the intricacies and potential pitfalls of premium financing plans. As the insurance industry continues to evolve, it is crucial for both carriers and consumers to carefully consider the terms and implications of such arrangements to avoid future disputes.