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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ZIFL Volume 30, Number 2
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5260
Read the full article at https://lnkd.in/gzCr4jkF, see the video at https://lnkd.in/g432fs3q and at https://lnkd.in/gcNuT84h, https://zalma.com/blog, and at https://lnkd.in/gKVa6r9B.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
The Contents of the January 15, 2026 Issue of ZIFL Includes:
Use of the Examination Under Oath to Defeat Fraud
The insurance Examination Under Oath (“EUO”) is a condition precedent to indemnity under a first party property insurance policy that allows an insurer ...
ERISA Life Policy Requires Active Employment to Order Increase in Benefits
Post 5259
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In Katherine Crow Albert Guidry, Individually And On Behalf Of The Estate Of Jason Paul Guidry v. Metropolitan Life Insurance Company, et al, Civil Action No. 25-18-SDD-RLB, United States District Court, M.D. Louisiana (January 7, 2026) Guidry brought suit to recover life insurance proceeds she alleges were wrongfully withheld following her husband’s death on January 9, 2024.
FACTUAL BACKGROUND
Jason Guidry was employed by Waste Management, which provided life insurance coverage through Metropolitan Life Insurance Company (“MetLife”). Plaintiff contends that after Jason’s death, the defendants (MetLife, Waste Management, and Life Insurance Company of North America (“LINA”)) engaged in conduct intended to confuse and ultimately deny her entitlement to...
Failure to Respond to Motion to Dismiss is Agreement to the Motion
Post 5259
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In Mercury Casualty Company v. Haiyan Xu, et al., No. 2:23-CV-2082 JCM (EJY), United States District Court, D. Nevada (January 6, 2026) Plaintiff Mercury Casualty Company (“plaintiff”) moved to dismiss. Defendant Haiyan Xu and Victoria Harbor Investments, LLC (collectively, “defendants”) did not respond.
This case revolves around an insurance coverage dispute when the parties could not be privately resolved, litigation was initiated in the Eighth Judicial District Court of Nevada. Plaintiff subsequently filed for a declaratory judgment in this court.
On or about April 15, 2025, the state court action was dismissed with prejudice pursuant to a stipulation following mediation. Plaintiff states that the state court dismissal renders its ...
Court Must Follow Judicial Precedent
Post 5252
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Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
In Montrose Chemical Corporation Of California v. The Superior Court Of Los Angeles County, Canadian Universal Insurance Company, Inc., et al., B335073, Court of Appeal, 337 Cal.Rptr.3d 222 (9/30/2025) the Court of Appeal refused to allow extrinsic evidence to interpret the word “sudden” in qualified pollution exclusions (QPEs) as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term “sudden” in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean ...
Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
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He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
