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In re National Western Life Insurance Deferred Annuities Litigation

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


October 16, 2007

IN RE: NATIONAL WESTERN LIFE INSURANCE DEFERRED ANNUITIES LITIGATION

The opinion of the court was delivered by: Hon. Leo S. PapasU.S. Magistrate Judge

SECOND SUPPLEMENTAL ORDER RE: PLAINTIFFS' REQUEST FOR DOCUMENTS NO. 36 & 37

During a discovery conference on May 3, 2007, the parties brought to the Court's attention two issues relating to document production. Specifically, Plaintiffs sought to obtain copies of Defendant National Western Life Insurance Company's ("NWL") policyholder complaint files (Document Request No. 36) and certain documents related to state insurance regulators' examinations of NWL's market practices (Document Request No. 37), both of which they claim are relevant to a motion for class certification. In order to expedite resolution of the issues, the parties agreed to provide the Court with letter briefs in lieu of formal briefing.*fn1 After review of the briefs, the Court ruled documents responsive to both requests are discoverable. DOC. 86 NWL had argued that policyholders' personal information should be redacted from the complaint files prior to production. The Court rejected the argument as it applied to policyholders' contact information (names and addresses) and ordered this information be produced subject to the operative protective order and a Colonial Life method of notification, utilizing a Pioneer Electronics "opt out" method of procuring the policyholders' consent. citing Colonial Life & Acc. Ins. Co. v. Superior Court, 647 P.2d 86 (Cal. 1982) and Pioneer Electronics, Inc. v. Superior Court, 40 Cal. 4th 360 (2007).

After receiving additional information and letter briefing, the Court later determined the policyholders' medical and financial information is also discoverable. DOC. 86. Due to the highly sensitive nature of this information, the Court ordered the Colonial Life letter utilize an "opt in" method of obtaining policyholders' consent prior to production. The parties were also ordered to prepare a Colonial Life letter.

Although the parties were able to reach an agreement on the language for the majority of the Colonial Life letter, there were several issues in dispute. Additionally, to eliminate confusion that might result from policyholders receiving a Colonial Life letter providing dual instruction on the opt in/opt out methods of procuring appropriate consent, Plaintiffs elect to withdraw their request for medical and financial information, without prejudice to renewing their request for this information at a later stage in the litigation. NWL argues Plaintiffs' election to narrow the scope of their discovery request effectively waives their right to seek the information in the future. The Court has recieved and reviewed additional letter briefing from both parties related to these issues. After review of this briefing and after due consideration, the Court denies without prejudice NWL's request to bar Plaintiffs from future requests for policyholders' medical or financial information. The Court further orders the text of Exhibit A to this order be utilized for the Colonial Life letter and accompanying consent form.

Dear Policyholder,

This letter is being sent to you because you purchased an annuity from National Western Life Insurance Company ("National Western") and corresponded with National Western, sometime during the period of 2000 and 2006 with one or more complaints about your policy.

The Lawsuit Against National Western Four people who purchased deferred annuities issued by National Western have filed a lawsuit in the United States District Court for the Southern District of California against National Western. The case is entitled: In re National Western Life Insurance Deferred Annuities Litigation, United States District Court for the Southern District of California, Case No. 05CV1018-JM(LSP). These four plaintiffs have asked the court to certify their lawsuit as a class action lawsuit.

This lawsuit involves the claim that National Western fraudulently solicited, marketed, and sold deferred annuities to persons who were 65 years of age or older at the time their annuity was purchased. The four plaintiffs each purchased an annuity from National Western, and they claim that National Western failed to provide full and fair disclosures concerning such products. National Western denies that it committed any wrongdoing, and contends that at all times its conduct was lawful and it made all appropriate disclosures about deferred annuities to any purchaser, including people who were 65 or older.

In their lawsuit, the four policyholders seek to recover not only on their own behalf but also are asking the court to let them act as class action representatives for the benefit of all other policyholders who were 65 or older when they bought an annuity from National Western. National Western opposes this request for a class action.

The court has not yet decided if this complaint should be treated as a class action and will not make that decision until later. If the court agrees with the plaintiffs that this suit should be confirmed as a class action, then the plaintiffs' lawsuit would be prosecuted on behalf of all persons who were 65 or older when they bought their annuities and you may be asked to join as a member of the class action suit. However, at the present time you are not included as a party to the lawsuit.

The Request for Information As part of the lawsuit, the attorneys for the plaintiffs have asked the court to require National Western to produce to the plaintiffs the letter(s) of complaint you wrote to National Western regarding your annuity and any documents created by National Western related to your letter(s) of complaint. Plaintiffs are also asking for documents of the sales agent who sold the annuity to you.

Plaintiffs believe the information they have requested may be helpful in their request that the court treat this lawsuit as a class action. However, before any documents are produced by National Western to the plaintiffs, the court has ordered this letter be sent to you so you can decide whether your identity (name) and contact information (address), which specific information is protected from disclosure under both federal and California law, should be disclosed. It is your choice whether to allow your identity and contact information (name and address) to be provided to the plaintiffs. What Are Your Options You may either object or not object to the plaintiffs having your identity (name) and contact information (address). The decision whether to allow the plaintiffs to see this information is entirely yours. You will have absolutely no financial obligation to either National Western or the plaintiffs regardless of what you decide.

EXHIBIT A

IF YOU DO NOT OBJECT TO DISCLOSURE:

If you do not object to plaintiffs having your identity (name) and contact information (address) and, thus, possibly contacting you, you are not required to do anything. Unless National Western receives a written objection within 45 days, your name and contact information will be released to the plaintiffs' attorneys.

If you allow plaintiffs access to this information it will be protected from public disclosure by a strict confidentiality order.

IF YOU OBJECT TO DISCLOSURE:

If you object and choose to withhold your identity (name) and contact information (address) you must notify National Western in writing within 45 days of the date of this letter. You may indicate your choice on the enclosed form or in written correspondence. Your notice should be returned to National Western at the address below.

If National Western does not receive your written objection by [insert date for deadline to return forms], your name and contact information will be released to the attorneys for plaintiffs, however, it will be protected from public disclosure by a strict confidentiality order. [Insert National Western mailing address]

EXHIBIT A

DECISION FORM REGARDING DISCLOSURES TO BE MADE

In re National Western Life Insurance Deferred Annuities Litigation, United States District Court for the Southern District of California, Case No. 05CV1018-JM(LSP).

I, _____________________________, make the following choice: (print name) (Check only one option) _____ Please do not disclose my identity (name) and contact information (address) to the plaintiffs' attorneys.* _____ My identity (name) and contact information (address) may be disclosed to the plaintiffs' attorneys, subject to the strict confidentiality order which protects against public disclosure.

Policyholder name: ____________________________ (please print clearly) Policyholder signature: ____________________________

* If you choose to withhold your name and contact information from the plaintiffs' attorneys, you must complete this form and mail it to the following address no later than [insert date for deadline to return forms]

[Insert appropriate mailing address for National Western]

EXHIBIT A


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