Advocate Law Group Says Northwestern Mutual Life, By Claiming "Only The Fine Print" Matters, Admits What Insurance Companies Long Denied

    IRVINE, CA, March 21, 2011 /24-7PressRelease/ -- At a press briefing today, one of the plaintiff's attorneys in the case of Smith v. Northwestern Mutual Life -- now pending in Federal District Court in Milwaukee -- labeled the somewhat novel "you can't believe anything we say" defense offered by Northwestern Mutual Life and its lawyers as the "Wizard of Oz Defense."

The lawsuit asserts Northwestern Mutual Life has been significantly overcharging hundreds of thousands of policyholders it promised a "flexible" policy loan interest rate "based on long term economic conditions." Instead the company has been charging an 8% rate for 33 years, even as interest rates plummeted.

Pay No Attention to the Man Behind the Curtain

"Fans of the classic film will recall," said Bob Scott of Advocate Law Group P.C., co-counsel for the plaintiffs, "that when Dorothy and her merry band discovered that the great Wizard was really a very ordinary man, the booming voice declared '...pay no attention to the man behind the curtain.'"

Documented evidence shows that Northwestern Mutual Life and its former President F.E. Ferguson wrote to millions of policyholders explicitly promising that the interest rate the company would charge them would be "flexible" and would "vary based on prevailing long term economic conditions" but never exceed 8%.

Scott said "Northwestern Mutual now is claiming, by way of defense, that the Court should pay no attention to the big, bold written assurances it sent policyholders, only the fine print matters. No insurance company has ever argued that nothing the Company or its President says - even in writing - should be relied upon." It truly is a "Wizard of Oz defense."

Critics Like Consumer Czar Elizabeth Warren May Have Been Right After All

For many years industry critics, including Elizabeth Warren, the new White House Consumer Czar, have said insurance companies say one thing in their marketing messages, but they bury all the 'gotchas' in the fine print. "Insurance companies and their lobbyists have continued to deny these claims," Scott added. "Now that the cat is out of the bag, it will be very interesting to see if the industry's critics add this arrow to their quivers, and what the response of the other insurance giants and regulators will be. It would surely be ironic if the outrageous position taken by Northwestern Mutual Life and its lawyers helps Elizabeth Warren put an end to abusive practices by insurance companies."

About Smith v. Northwestern Mutual Life

The case, Smith v. Northwestern Mutual Life, is now pending in Federal District Court in Milwaukee, 2:11-CV-00071-RTR. This litigation could affect nearly one million policyholders who gave up the right to borrow against their policies' cash values at fixed rates of 5% and 6% in exchange for the promised "flexible" policy loan interest. As "long term economic condition" changed, with interest rates now hovering around 2% - 3%, Northwestern Mutual Life continues to charge them a fixed 8%. For further information see www.NorthwesternLawsuit.com.

About Advocate Law Group

Advocate Law Group P.C. represents policyholders nationwide from its offices in Irvine and Sausalito, California,together with members of the Advocate Law Group nationwide network of leading attorneys. Advocate partners Bob Scott (who has been lead counsel in a successful nationwide insurance class action) and Gerry Goldsholle (formerly President & CEO of MetLife Marketing Corporation)are former chairs of a California State Bar and American Bar Association insurance committees. The firm is representing current and former Northwestern Mutual Life policyholders who were tricked into amending their policies in exchange for what Northwestern Mutual Life now contends were its empty promises. For more information about Advocate Law Group P.C. and its partners see www.AdvocateLawGroup.com.

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