Expert May Not Testify About STOLI for Lack of Experience
Post 5227
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Insurer Needs to be Careful When Retaining an Expert With No Experience About the Key Issue in the Case.
In Ameritas Life Insurance Corp. v. Wilmington Savings Fund Society, FSB, United States District Court for the District of Delaware (Civil Action No. 23-236-GBW), Judge: Gregory B. Williams (November 7, 2025) Ameritas Life Insurance Corp. (“Ameritas”) sought to void a $3 million life insurance policy on the life of Marvin Flaks (the “Policy”) as a stranger-originated life insurance (“STOLI”) policy lacking an insurable interest under Delaware law.
Defendant Wilmington Savings Fund Society, FSB (“Wilmington Savings”), as securities intermediary and counterclaim-plaintiff, opposed and sought to enforce the Policy.
Motion at Issue:
Wilmington Savings’ Daubert moved the court to exclude testimony of Ameritas’ expert, Michael L. Vild, under Federal Rule of Evidence 702. The motion targets four categories of Vild’s opinions from his expert reports (served June–August 2025): (1) choice-of-law analysis; (2) STOLI and insurable interest; (3) reasonableness of Ameritas’ investigation; and (4) life insurance investor practices.
Factual Background - STOLI Context:
STOLI involves speculators procuring life insurance policies on strangers’ lives for resale of death benefits, circumventing the “insurable interest” requirement (a policyholder must have a legitimate economic or familial stake in the insured’s continued life to prevent wagering on death.
Delaware’s seminal case, PHL Variable Ins. Co. v. Price Dawe 2006 Ins. Tr. (28 A.3d 1059 (Del. 2011)), declared STOLI policies void ab initio as against public policy.
The Policy:
Ameritas alleges it was procured via STOLI scheme and lacks insurable interest.
Expert (Vild’s Qualifications) - Employment:
Partner at Cross & Simon, LLC (2019–present; corporate litigation, no STOLI experience); Director, Delaware DOJ Fraud Division (2017–2019; no shown STOLI work); casino counsel (2008–2017; unrelated); Deputy Insurance Commissioner, Delaware DOI (2005–2008; oversaw regulation, attended NAIC meetings where STOLI/viatical settlements discussed, involved in regulatory discussions but no enacted STOLI regs or direct enforcement); prior law firm roles (1991–2004; no shown STOLI work). J.D. (Notre Dame, 1991); B.Mus. (Ohio State, 1988). Board roles in captive insurance/reinsurance; bar memberships; personal activities (e.g., music, horse racing). Limited recall of direct STOLI work; no litigation or advisory on life insurance/STOLI; captive insurance unrelated to insurable interest.
Legal Standard
Trial courts gatekeep expert testimony, requiring proponent to show (by preponderance) it is:
(a) helpful to trier of fact;
(b) based on sufficient facts/data;
(c) product of reliable methods; and
(d) reliably applied to case facts.
Court’s Analysis and Ruling
The court granted the motion in part (excludes on issues 3–4; partial exclusions on 1–2) and denies in part, emphasizing Vild’s regulatory experience qualifies him for generalized insurance testimony but not ultimate legal conclusions, claims handling, or investor-specific practices.
Conclusion
The court granted preserved Vild’s testimony on general Delaware insurance regulatory interests and STOLI principles (but not case-specific applications) while excluding it on investigation reasonableness and investor practices. Therefore, the ruling narrows Ameritas’ expert evidence ahead of trial on the Policy’s validity, underscoring Daubert’s gatekeeping for topic-specific expertise in insurance disputes.
ZALMA OPINION
STOLI policies are invalid and void from inception in Delaware because they violate the requirement of every life insurance policy that the beneficiary has an insurable interest in the life insured. Rather than being insurance STOLI policies are a gamble on the life of the insured making a profit if the insured dies quickly after the policy was issued. The Insurer retained as an expert a person who knew insurance but had no knowledge of STOLI and wanted to testify about ultimate issues that were the sole province of the court. Applying the gate keeping function the court limited Vild’s testimony to generalized insurance practice.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Post number 5357
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Qui Tam Case Without Evidence to Prove Fraud Fails
Post number 5369
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In People Of The State Of California Ex Rel. Heath & Yuen, APC v. Silver Bird Auto Leasing, LLC et al., B342847, California Court of Appeals, Second District, Eighth Division (June 5, 2026) Heath & Yuen, APC defended parties in an automobile collision case involving a McLaren and a tour van. After that case settled for $25,000, the firm filed a qui tam action under California’s Insurance Frauds Prevention Act (IFPA) against Silver Bird Auto Leasing, LLC, X-Law Group, PC, and Filippo Marchino. The firm alleged three fraudulent acts in the underlying litigation:
1. the complaint falsely stated the McLaren was making a “legal turn,”
2. respondents produced a fraudulent repair bill/estimate, and
3. respondents failed to disclose Marchino’s GEICO insurance and its payment for repairs....
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Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
Full Faith and Credit Act Controlled
Read the full article at https://lnkd.in/evHXiiFE and at https://zalma.com/blog.
Posted on June 9, 2026 by Barry Zalma
Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
