Transamerica long-term care lawsuits generally fall into three groups: individual policyholders suing over denied benefits, a state regulator penalizing the company for claim-handling failures, and Transamerica itself suing policyholders it accuses of faking claims. Alongside the courtroom fights, existing policyholders have faced steep premium increases tied to the parent company’s decision to stop selling new long-term care coverage and manage the existing book in runoff.
Lawsuits by Policyholders Over Denied Benefits
Several suits have turned on how Transamerica reads its own policy language, particularly around where care is delivered and who may be paid to give it.
Gutowitz: What Counts as a “Nursing Home”
In Gutowitz v. Transamerica Life Insurance Co. (C.D. Cal. No. CV-14-06656), an insured sued after Transamerica refused to pay nursing home benefits for care received in an assisted living facility. Transamerica argued the facility did not qualify because it lacked the required state license. In August 2015, U.S. District Judge Margaret Morrow denied Transamerica’s motion for summary judgment, finding the policy language ambiguous and holding that a reasonable insured would have understood the policy to cover a facility employing a nurse to provide ongoing nursing services.1Elder Law Answers. Assisted Living Resident May Proceed With Breach of Contract Claim Against Long-Term Care Insurer Court records show the case was terminated on November 5, 2015, under a stipulation and order, suggesting a confidential resolution.2CourtListener. Erwin J. Gutowitz v. Transamerica Life Insurance Company
A Washington Class Action That Went the Other Way
The same licensing question produced a different result in the Western District of Washington. A putative class action sought to represent Washington policyholders whose nursing home benefit claims were denied because their facilities lacked a state “nursing home” license, and asked the court to rewrite the policy language to waive the licensing requirement for assisted living residents. Chief Judge Ricardo S. Martinez granted summary judgment for Transamerica, and the Ninth Circuit unanimously affirmed.3Carlton Fields. Carlton Fields Successfully Defends Transamerica Whether a licensing challenge succeeds appears to depend heavily on the specific policy wording and the theory the plaintiff pleads.
Maguire: A Caregiver Ruled Ineligible
In Maguire v. Transamerica Life Insurance Company (C.D. Cal. No. 2:22-cv-03048), plaintiff Virginia Maguire alleged that Transamerica and its third-party claims administrator, Long Term Care Group, wrongfully denied benefits by classifying the daughter of her deceased same-sex partner as an “Immediate Family” member ineligible to serve as a paid caregiver under the policy. The complaint brought claims for breach of contract, breach of the covenant of good faith and fair dealing, elder abuse, and negligence. On the same day the lawsuit was filed, May 6, 2022, Transamerica reversed its March 15, 2022 denial and re-approved the caregiver.4EIN Presswire. Transamerica Imputed Marriage on a Same-Sex Couple to Deny Long-Term Care Benefits
Kozey: A Buyout That Was Never Paid
In state court in Milford, Connecticut, the estate of Patricia Kozey sued Transamerica over a long-term care policy buyout. Transamerica offered in September 2022 to purchase Kozey’s policy for $63,324.56. She accepted, but died on January 9, 2023, before payment was made. Her husband and executor, Russell Kozey, alleged that the accepted offer was a binding agreement and that Transamerica refused to honor it. The complaint sought monetary compensation, interest, and costs.5ThinkAdvisor. Transamerica Faces Suit Tied to Long-Term Care Buyout
When Transamerica Sues the Policyholder
Claim disputes do not only run one direction. Transamerica has filed its own fraud actions against policyholders it accuses of exaggerating functional limitations to collect benefits, and it has won large judgments in both cases below.
Arutyunyan: Surveillance, Discovery Sanctions, and a Frivolous Appeal
In Transamerica Life Insurance Company v. Arutyunyan (C.D. Cal. No. 2:20-cv-04684), Transamerica sued policyholder Akop Arutyunyan and his daughter Anahit, alleging they conspired to defraud the company. Private investigators reported seeing Akop walking without a limp, driving, shopping, and functioning independently despite his claim that he needed a home caregiver for basic daily activities. Transamerica also alleged the named caregiver never actually visited the home. The company had paid $109,381.71 in benefits before stopping.6ThinkAdvisor. Transamerica Wins Long-Term Care Benefits Appeal
The district court entered default judgment as a sanction after the Arutyunyans repeatedly failed to comply with discovery orders, including refusing to produce tax returns and social media passwords.7Elder Law Answers. Court Upholds Default Judgment Against LTCI Policyholder The court awarded Transamerica $109,381.71 in compensatory damages, $218,763.42 in statutory treble damages under a California fraud statute, and $166,394.50 in attorney’s fees.8Ninth Circuit. Transamerica Life Insurance Company v. Arutyunyan, No. 22-55199 The Ninth Circuit affirmed on February 22, 2024, called the appeal itself “frivolous,” and ordered defendants and their attorney to show cause why they should not be sanctioned and referred to the State Bar of California.6ThinkAdvisor. Transamerica Wins Long-Term Care Benefits Appeal
Egan: A Full-Time Demolition Job
In July 2025, Transamerica sued policyholder John Egan in the Northern District of California (Case No. 3:25-cv-06167), alleging he fraudulently obtained long-term care benefits by exaggerating limitations following a car accident. Investigators produced evidence that Egan was working a full-time demolition job, driving, repairing his truck, and shopping independently at Costco.9ThinkAdvisor. Long-Term Care Claimant Was Working Full Time in Demolition, Transamerica Says
Egan did not respond. In May 2026, U.S. District Judge James Donato entered default judgment awarding Transamerica $148,497 in recovery of paid benefits, $23,801 for investigation and medical examination costs, $35,073 in attorney’s fees, and $1,031 in court costs. The court declined to award punitive damages.9ThinkAdvisor. Long-Term Care Claimant Was Working Full Time in Demolition, Transamerica Says
Minnesota’s $500,000 Claim-Handling Penalty
Regulators have also weighed in. On November 4, 2022, the Minnesota Department of Commerce issued a consent order imposing a $500,000 civil penalty against Transamerica for failing to fully correct long-term care claim handling deficiencies identified in a prior consent order from February 2019. The order required Transamerica to establish a new corrective action plan within 90 days.10Minnesota Department of Commerce. Consent Order, File No. 76588 A Fox 9 investigation reported that the fine followed a surge in consumer complaints about the company’s handling of nursing home care claims.11Fox 9. Delay, Deny: How Insurance Company Avoided Paying Nursing Home Care
Premium Increases on Existing LTC Policies
Existing policyholders have run into a separate problem: sharp, repeated premium hikes on coverage they bought expecting stable rates. A Connecticut policyholder writing for the CT Mirror described buying a long-term care policy in 2004 on the understanding that rates were “level-funded.” Transamerica’s own prospectus at the time stated the company had sold these policies since 1991 and that “there have been no increases to date.”12CT Mirror. Our Story of the CT Long-Term Care Insurance Crisis
Between 2004 and 2020, the Connecticut Insurance Department approved four increases on that policy, totaling a 92% cumulative rise. Three additional increases approved between 2021 and 2023 would have taken the annual premium from $5,876 to $12,526, a 309% jump from the original rate. To avoid the last round, the policyholder accepted a reduction in daily benefit inflation protection from 5% to 1.98%, a trade the policyholder characterized as saving about $14,500 in future premiums while cutting Transamerica’s future exposure by roughly $330,000.12CT Mirror. Our Story of the CT Long-Term Care Insurance Crisis
Why the Rate Increases Keep Coming
Transamerica is a subsidiary of Aegon, the Dutch financial services company. In December 2020, Aegon announced that Transamerica would stop selling individual standalone long-term care insurance. Sales of TransCare II and TransCare III ended March 31, 2021, and acceptance of multi-life applications ended June 30, 2021. Existing policyholders kept their coverage, but agents were shifted to servicing-only status with no policy upgrades permitted.13LTCI Partners. Transamerica Exiting the Standalone LTC Market
The standalone long-term care block held $6.5 billion in reserves as of the end of 2022 and is being managed in runoff.14Transamerica. Moody’s Aegon USA Credit Opinion As of the third quarter of 2025, state regulators had approved $822 million in LTC premium rate increases since the end of 2022, exceeding the company’s original $700 million target, and Transamerica has said it intends to seek further actuarially justified increases.15Aegon. Aegon Trading Update for Third Quarter 2025
Moody’s has described the LTC block as “vulnerable to potential reserve increases if claims experience worsens or in case of sustained low interest rates,” and noted that societal trends could limit the company’s ability to pass adverse experience on to policyholders through further premium increases.14Transamerica. Moody’s Aegon USA Credit Opinion For current policyholders, that framing describes the pressure behind both the rate filings and the intensity around claims.