Oct. 26, 2009 (PR Newswire) --

LOS ANGELES, Oct. 26 /PRNewswire/ -- PHL Variable Insurance Company ("PHL") and Phoenix Life Insurance Company ("Phoenix") have been sued in lawsuits alleging, among other things, that the insurance companies targeted elderly individuals to purchase multi-million dollar life insurance policies with the false representation that the life insurance policies may be freely transferred or assigned. According to California attorney Gerald Kroll, this may be the largest life insurance litigation of its type.

The Phoenix Companies, Phoenix's publicly traded parent company, set up a subsidiary, Phoenix Life Solutions, to purchase life insurance policies in exchange for an immediate cash settlement, the lawsuit alleges. Meanwhile, PHL and Phoenix issued policies that gave them, or their affiliate, Phoenix Life Solutions, the right of first refusal to offer money to purchase the policies when a third-party offered money for a policy transfer. But, according to the allegations, when policyholders actually were able to achieve money offers, the companies neither matched the offers nor acknowledged the validity of or allow the transfer to the new policy owners.

Instead, when policy owners attempt to transfer or assign their PHL life insurance policies to unrelated parties, PHL allegedly rescinds or seeks to rescind the policies and attempts to confiscate the premiums. It is alleged that Phoenix does the same thing.

On October 26, 2009, the 2nd of two lawsuits was filed in Santa Barbara Superior Court by Alan Fenton, as Trustee of 14 life insurance trusts, and Olive Tree Holdings, LLC against PHL and Phoenix for Fraud and other causes of action. The 1st lawsuit was filed on June 25, 2009 by Alan Fenton, as trustee of 17 life insurance trusts, and XLI Holdings, LLC against PHL for Fraud and other causes of action. Combined, the policies at issue in both cases have a face value that exceeds $260,000,000.00.

SOURCE Attorney Gerald Kroll