Miami Retirement Trust Files Lawsuit Against Globe Life for Alleged Misconduct

A significant legal battle looms for Globe Life, previously known as Torchmark Corporation, as it faces a class action lawsuit initiated by the City of Miami General Employees’ & Sanitation Employees’ Retirement Trust. The lawsuit, which was filed in the US District Court for the Eastern District of Texas by Bernstein Litowitz Berger & Grossmann LLP, spans alleged misconduct from May 8, 2019, to April 10, 2024.

The crux of the lawsuit is based on accusations that Globe Life, alongside certain past and present executives, provided misleading statements about the company’s financial health and failed to adhere to its own code of business conduct. Notably, these statements were related to the company’s premium revenue growth, which was attributed to increases in agent numbers and their productivity—a point now under intense scrutiny.

Further compounding the company’s troubles, a report released on April 11, 2024, by an investment research firm detailed severe allegations of insurance fraud dating back to 2017. This included issuing policies to non-existent parties and unauthorized additions of policies to existing customer accounts, which may have artificially inflated the company’s stock price.

Additionally, the complaint addresses serious allegations of a toxic work environment characterized by unchecked sexual harassment and drug use among employees, starkly contrasting with the company’s public commitment to maintaining an inclusive and safe work environment. These revelations pose significant reputational and financial risks to Globe Life, particularly impacting its largest subsidiary, American Income Life Insurance Company, known for its extensive network of sales agents and premium collections.