State Farm Loses Cost of Insurance (COI) Lawsuit Appeal

The U.S. Court of Appeals for the Eight Circuit upheld the court ruling in Vogt v. State Farm. The $34M judgement against State Farm stands unless the company decides it has grounds to appeal this decision to the U.S. Supreme Court.

In this case, plaintiff Michael Vogt argued that State Farm used non-mortality factors when setting the COI rates in his life insurance policy. State Farm was unable to convince the courts otherwise and ambiguous contract language is viewed in favor of the customer. This case, and others like it, are being closely watched by the life insurance industry as carriers seek to manage product profitability in the prolonged low interest rate environment.

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