NASCAR Champion Kyle Busch’s lawsuit against Pacific Life Insurance Company for $8.6 million in damages has moved to a federal court in North Carolina. Kyle and Samantha Busch filed the lawsuit in October alleging misrepresentations in connection with a life insurance retirement plan funded with a Pacific Life Indexed Universal Life insurance policy.
The complaint alleges that Pacific Life and the agent promoted the LIRP as a tax-free retirement strategy and misled the Busches about the IUL policy by providing false information via illustrations, promises of guarantees and information related to policy charges.
While the lawsuit most likely will be settled out of court, Busch’s celebrity puts a spotlight on certain life insurance sales practices that could lead to calls for industry reform. Aside from tighter regulations on sales practices, another possible reform would be the adoption of a fiduciary standard in the life insurance sales industry which has historically rejected the fiduciary standard in favor of the lower level, suitability standard.
