CalPERS Long-Term Care Insurance Lawsuit Goes to Trial

The Fresno Bee reported on June 10, 2019 that a $1.2 billion lawsuit affecting approximately 100,000 CalPERS members and dependents whose CalPERS long-term care insurance policies were subject to steep premium increases will go to trial on Monday, June 17, 2019.

According to the Bee article "The class-action lawsuit claims the California Public Employees’ Retirement System violated insurance policy terms when it increased premiums by 85 percent in 2015 and 2016 after promising policyholders stability." Michael Bidart, the attorney representing the plaintiffs in the case, claims that the policyholders were completely misled by CalPERS, while CalPERS claims it had a right to raise premiums. In addition, CalPERS claims that because it had raised long-term care premiums in 2003, 2007, 2010, 2011, 2012 and 2013 without legal action by policyholders the suit should have been filed much earlier to be valid.

CalPERS began selling long-term care insurance in 1995 at rates that were approximately 30% lower than other insurers. However it soon found itself in the same predicament that most other long-term care insurers were facing; namely, faulty underwriting assumptions. Seniors' life-spans were increasing, and the cost of providing long-term care were increasing at faster rates than had been assumed when the policies were priced.

The issues in the case are quite complex. The trial could end quickly if the judge rules that CalPERS' contention that the plaintiff's case was filed too late after damages were incurred, or it could drag on for months if the judge rules otherwise.

Court documents in the case can be found at


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