New Economy IUL Lawsuit Claims and Pacific Life Settlement

Kyle Busch and his wife Samantha sued Pacific Life Insurance Company in October 2025, alleging they lost more than $8.5 million on five indexed universal life policies that were sold to them as a safe, tax-free retirement plan. The two-time NASCAR Cup Series champion said the couple paid roughly $10.4 million in premiums over five years before an independent review found the policies were on track to lapse. The Kyle Busch Pacific Life lawsuit settled confidentially in February 2026, and the terms were not disclosed.¹²

What the Busches Bought and How It Was Pitched

Between 2018 and 2022, the couple purchased five Pacific Life indexed universal life policies, specifically the Pacific Discovery Xelerator product. The sales were handled by Rodney A. Smith, an Arizona-based insurance producer operating through a Nevada company called Red River LLC. Smith had been appointed as a Pacific Life producer in January 2017 and marketed himself as a “Wealth Management and Insurance Specialist” and “Retirement Planner.”³

According to the complaint, Smith presented the policies as a “tax-free retirement strategy” rather than as insurance. Kyle Busch said he was told that by putting in $1 million a year for five years, he could begin withdrawing around $800,000 annually starting at age 52. The Busches alleged Smith and Pacific Life used illustrations showing inflated growth projections while failing to adequately disclose internal charges, mortality costs, and the risk that the policies could lapse.¹

The complaint also alleged Smith had a disciplinary history with the North Carolina Department of Insurance, which had previously cited him for providing false and misleading information on a license application, including a failure to disclose a criminal conviction. The Busches argued Pacific Life knew or should have known about that background.⁴

How They Discovered the Problem

The Busches said they had expected the policies to become self-sustaining after five years of premium payments. Instead, a sixth premium notice arrived. When they tried to get answers, they said they were “given the runaround,” which prompted them to hire an independent firm to review the policies.⁵

The outside analysis concluded the policies were projected to lapse within 16 months. The promise of decades of tax-free retirement withdrawals, the Busches said, turned out to be “a lie.” Net out-of-pocket losses exceeded $8.58 million on the $10.4 million paid in.¹

In a public statement, Kyle Busch said: “These policies were sold to us as part of a retirement plan — something safe and secure. We trusted the people who sold them, and the name Pacific Life. But the reality is far different.” Samantha Busch said she was learning “how completely misrepresented these products can be when they’re sold.”⁶

The Claims They Filed

The suit was filed October 14, 2025, in the Superior Court of North Carolina in Lincoln County (Case No. 25CV002675-540), naming Pacific Life, Rodney Smith, and Red River LLC as defendants. It was later moved to the U.S. District Court for the Western District of North Carolina.⁴⁷

The complaint asserted breach of fiduciary duty, negligent misrepresentation, and violations of North Carolina’s Unfair and Deceptive Trade Practices Act. The Busches argued that Smith crossed from insurance producer to investment advisor by offering retirement and tax planning advice, which they said carried fiduciary obligations he then breached. An amended complaint alleged that Pacific Life’s own distribution personnel participated in structuring internal policy exchanges to reset commissions and fees.³

The couple was represented by Robert G. Rikard, founding attorney of RP Legal LLC in Columbia, South Carolina, a firm that focuses on IUL-related litigation. Rikard said he has represented more than 400 clients in similar cases and called the Busch matter “a clear example” of how complex insurance contracts are sold as “simple, risk-free retirement plans.”⁶

Pacific Life’s Response

Pacific Life, Smith, and Red River filed a motion to dismiss in January 2026. The defense rested on several arguments drawn from the memorandum of law filed with the court.⁸

Pacific Life said most of the claims were time-barred, arguing that North Carolina’s three-year statute of limitations began running when the Busches received the first policies and illustrations in 2018, and that a tolling agreement did not take effect until May 2025. The company pointed to documents the Busches signed, including applications and illustrations, that stated values were “not guarantees, promises, or warranties” and that the producer, not Pacific Life, was responsible for ensuring the policies met the couple’s needs. It said the Busches had signed illustrations indicating they intended to pay premiums and hold the policies through age 70 and beyond, but instead stopped funding some policies and surrendered others.⁸

Pacific Life also characterized the suit as an attempt to collect a “massive windfall,” noting the Busches had up to $90 million in insurance coverage while the policies were active. A company spokesperson said Pacific Life “stand[s] by all our life insurance products, including Indexed Universal Life.”⁹

The Confidential Settlement

The court never ruled on the motion. On February 26, 2026, a notice of settlement was filed with the U.S. District Court in the Western District of North Carolina, stating that the parties intended to file a stipulation or motion for dismissal within 30 days.²

Settlement terms are confidential. A joint statement issued through Rikard and a Pacific Life spokesperson said: “The Busch family and Pacific Life are pleased to have reached an amicable resolution of their dispute. Both sides worked constructively to achieve a confidential result that is mutually acceptable and avoids further legal proceedings.”¹⁰

Because the case ended in settlement, no court ruling was issued on the merits of the Busches’ allegations or on Pacific Life’s defenses.

Related Litigation Over the Same Product

The Busch case was not the only legal action involving the Pacific Discovery Xelerator policy. A separate California class action, Mamboleo v. Pacific Life Insurance Company, was filed in 2021 in Orange County Superior Court on behalf of people who purchased those policies in California between 2016 and 2019. That case alleged Pacific Life used misleading illustrations showing inflated profitability.¹¹

Pacific Life agreed to a $58 million settlement in the California case in late 2025. Under the proposed terms, current policyholders would receive credits to their accumulated values from a $33 million fund, and former policyholders could receive up to three years of term life insurance coverage from a $25 million fund. Final approval was scheduled for May 2026.¹¹

RP Legal LLC said it was investigating additional cases around the country involving Rodney Smith and Pacific Life that allegedly followed the same pattern of commission-driven policy structuring described in the Busch complaint.¹²

1
InsuranceNewsNet. Shocking Death of Kyle Busch Renews Debate Over IUL Plan
2
Insurance Journal. Kyle and Samantha Busch Settle $8.5 Million Lawsuit With Pacific Life
3
Retirement Income Journal. Filed Amended Busch Complaint
4
ALM. Kyle Busch vs. Pacific Life Complaint
5
Yahoo Finance. Kyle Busch $8M Loss Warning
6
PR Newswire. NASCAR Legend Kyle Busch and Wife Samantha Represented by RP Legal Lose $8.5 Million
7
ThinkAdvisor. NASCAR Champ Kyle Busch’s Pacific Life Lawsuit Moves to Federal Court
8
BonkNote. Memorandum of Law, Pacific Life Motion to Dismiss
9
Retirement Income Journal. Pacific Life’s Motion to Dismiss the Busches’ Suit: Excerpts
10
InsuranceNewsNet. Kyle Busch, Pacific Life Reach Confidential Settlement, Seek to Dismiss Lawsuit
11
InsuranceNewsNet. Pacific Life Agrees to a $58M Settlement in California PDX Class Action
12
RP Legal LLC / Investor Loss Center. Amended Busch Complaint