Charles S. and Linda Griffeth filed a consumer class action complaint asserting various claims against Principal Mutual Insurance Company arising out of the Griffeths’ purchase of insurance. The Griffeths’ complaint asserts that in 1993 they approached an insurance agent in an effort to obtain group insurance coverage. The agent told them that Principal offered a group health insurance policy to individuals like the Griffeths, who were self-employed. The Griffeths applied and were accepted for the Principal insurance. Following several years of substantial increases in their monthly insurance premiums, the Griffeths chose to cancel their Principal insurance policy in 1996. Previously, in the fall of 1995, the Griffeths had complained to the Insurance Commissioner about the increasing premiums. In response to this complaint, the Commissioner’s office sent Principal a letter expressing concern that the company was not complying with Georgia’s small group pooling laws. In February 1996, the Commissioner’s office notified Principal that it was referring the matter to its enforcement division for further action. In late 1996 Principal decided to terminate its coverage for all Georgia policyholders under the plan.
Shortly thereafter, the Griffeths filed their class action, asserting claims for fraud, Georgia RICO and breach of contract against Principal. The Griffeths later amended their complaint to assert claims for unjust enrichment and conspiracy to aid and abet the breach of fiduciary duty. The complaint as amended alleges that Principal engaged in an illegal and fraudulent scheme to market group insurance policies that were, in effect, individual polices to farmers, small businessmen and other individuals. In furtherance of this scheme, the Griffeths allege that Principal set up an illusory trust to obtain a group policy that could be marketed to individuals. Then, instead of selling individual policies, the trust issued certificates to individuals like the Griffeths as members of the trust. The complaint also alleges that Principal misrepresented the nature of this policy in offering it to the public and committed various illegal and tortious acts, including violations of the Georgia Insurance Code, OCGA § 33-2-1, et seq.
