A number of putative class actions were filed in the wake of AXA’s announcement in 2015 that it was increasing the Cost of Insurance (COI) for a group of flexible-premium life insurance policies. Plaintiffs eventually sought to certify two classes: one based on the policies themselves, and one based on AXA’s misrepresentations.  The District Court, sitting in the Southern District of New York, certified a nationwide Policy-Based Claims Class, a nationwide Illustration-Based Claims Class, and a New York Illustration-Based Claims Sub-Class, while denying certification of the proposed California Policy-Based Claims Sub-Class, the proposed California Elder Policy-Based Claims Sub-Class, and the proposed California Illustration-Based Claims Sub-Class.

Initially, the Court rejects defendant’s argument that “Plaintiffs’ claim-splitting strategy creates an irreconcilable conflict with the class, rendering Plaintiffs inadequate class representatives.”  For one thing, the Court had already held that the New York Insurance Code was applicable to policies issued in other states, and the potential recovery under N.Y. Insurance Law Section 4226 – i.e. damages in the amount of all premiums or other compensation AXA received – is likely to exceed recovery from any of the other state-specific claims.  Nevertheless, and in any event, the Court “can – and does – expressly reserve the right of absent class members who live outside of New York and California to file other claims arising out of the representations at issue.”

Addressing the Rule 23(b)(3) requirements, the Court held: “In order to recover under Section 4226, each class member must prove that AXA misrepresented the terms, benefits, and advantages of the AUL II policies; that these misrepresentations were material; that AXA knew its representations were false or misleading at the time they were made; that AXA knew its misrepresentations would be communicated to policy owners; and that AXA did not abide by its representations. Against this veritable laundry list of common questions, AXA identifies two elements that it claims require individualized proof: class members’ knowledge or receipt of the alleged misrepresentations and damages. But neither undermines a finding of predominance.

“AXA argues that Plaintiffs simply propose ‘adding up premiums paid on the Policies that are part of the proposed class, whether by current or prior owners.’  Were that the only methodology offered by Plaintiffs’ expert, the Court might agree that it is inadequate because it does not match Plaintiffs’ theory of harm. But Plaintiffs’ expert also calculated COI overcharges using the same formulas, uniform methodology, and data sources as for the claims for breach of contract. This methodology is consistent with the theory of harm Plaintiffs press in this motion, and it eliminates any concerns regarding individualized damages inquiries.

“Nor do questions regarding class members’ knowledge or receipt of the challenged misrepresentations defeat predominance. For one thing, there is at least some relevant common evidence. AXA issues an illustration in connection with its initial sale of every policy, which must be signed by the policy owner. AXA also keeps records of illustrations issued to policy owners and other authorized individuals while the policy is in force, and it has maintained copies of all such illustrations issued since 2012. And, although AXA does not have records of illustrations generated by third-party brokers or agents using AXA’s illustration software, Plaintiffs argue that a factfinder can infer knowledge because illustrations are the only indicator of projected future COI rates, critical information about the policies’ cost. AXA claims, first, that a reasonable person would not understand the illustrations to constitute projections, but that is of limited relevance at this stage. That is a common question, and if AXA is correct, the illustrations are not material, and Plaintiffs’ claims will fail on a class-wide basis.

“AXA also argues that there are other sources for information about COI rates, such as policy lapse notices and annual policy statements. But each source of information that AXA identifies reflects only the then-prevailing COI rate. They say little about what rates are likely to be in the future. Several million dollars may ride on future COI rates.

“To be clear, the Court does not hold that individual inquiries – into what class members knew or whether they received misrepresentations – are unnecessary. But the importance of any such inquiry would pale in comparison to the critical common issues – including whether the illustrations were materially misleading and whether AXA knew they were at the time. Common questions are not just more substantial than individual ones – they form the crux of the class claims. The Court’s conclusion would not change even if it were to conclude that more trial time would be devoted to these individual issues than common ones. When the nature and significance of common issues is weighed against individual issues, the balance tips firmly in favor of aggregation.”


In re AXA Equitable Life Ins. Co. COI Litigation, No.16-740, 2020 WL 4694172 (S.D.N.Y. Aug. 13, 2020).