A Wisconsin appeals court has revived a previously dismissed case against Northwestern Mutual Life Insurance Co. The company had been charged with breach of contract and breach of its legal duty to its policyholders because it changed the way surplus profits were credited to annuities.
In 1985, the company changed its methodology, therefore reducing the amount that annuity policyholders received. Before, the amount was based on investment returns of all the investments in the companys general account, including stocks and real estate. However, Northwestern then based the dividend payment only on the performance of bonds.
The appeals court reversed an earlier decision to dismiss the case, but it still must be classified for class-action status.