Insurers accused of fraud by life insurance trust
NEW ORLEANS – A New Orleans-based life insurance trust is suing an international finance corporation.
Susan H. Lipsey and Edward M. Haspel, co-trustees of Byrde B. Haspel and the Byrde Berenson Haspel Life Insurance Trust Number 1, filed suit on April 17 against Morgan Stanley Smith Barney LLC and Stephen A. Loeb in the Orleans Parish Civil District Court.
The plaintiffs claim they paid $66,000 a year beginning in 1999 for Byrde B. Haspel's $1 million life insurance policy to insurance broker Loeb who then transferred payment on to Morgan Stanley who used a third party insurer.
The plaintiffs allege that through years 2002 to 2009 the amount given to the third party insurer was often much less than initially paid and not enough to cover a minimum premium that would have allowed contributions to stay at the $66,000 level until Haspel turned 100 years old. The plaintiffs assert that since the minimum was not met, although unbeknownst to them, their premiums will rise to over $200,000 a year within four years.
The defendants are accused of breach of contract, breach of fiduciary duty, malfeasance, mismanagement and fraud.
An unspecified amount in damages is sought for all management fees, commissions and other compensation the insurers received since 2003. The plaintiffs request the defendants also pay the difference between the $66,000 per year premium as in the initial contract and the premium charged to maintain the $1 million policy.
The Haspel trust is being represented by New Orleans-based attorney Peter B. Sloss.
The case has been assigned to Division D Judge Lloyd J. Medley.
Case number 2012-03768
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