Insurance policies are contracts. Contracts between an insurance company and a policyholder. Like any other contract they can – and are – broken. A policyholder can break the contract by not paying the premium. The insurance company by not paying a claim or honoring a provision of the policy such as providing a legal defense for a policyholder in a negligence suit. When that happens the insurance company is exactly like any other party that broke a contract – they can be sued and they are liable for damages and other awards.
Life insurance, annuities, disability insurance, life insurance buy-out firms . . . when they refuse to pay or act in a ways that are not straightforward or in the best interests of their customers, we are there to see that they perform as promised. And, where appropriate, that they pay what they owe and all the penalties their behaviors warrant.