Penn Mutual Faces Action Over Life Insurance Surplus Funds

Law360, Philadelphia (November 1, 2012, 7:06 PM EDT) -- Pennsylvania Mutual Life Insurance Co. was hit by a class action Wednesday alleging the company improperly held on to profits rather than distributing them to policyholders as dividends, thus cheating policyholders out of more than $5 million over at least 18 years.

In the suit filed in Pennsylvania federal court, Daniel and Edith Harshbarger contended that Penn Mutual was obligated by state law to return all profits over a "safety fund" limit — capped at 10 percent of its reserves — to participating policyholders, and claimed...
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