Columbia, SC – January 2026 — An amended federal complaint filed by Robert Rikard and RP Legal LLC on behalf of Kyle Busch and Samantha Busch adds substantial new allegations detailing the direct involvement of Pacific Life Insurance Company employees and distribution personnel in the design, approval, and execution of a compensation-driven Indexed Universal Life insurance replacement.
The amended filing expands the case beyond agent misconduct and alleges that Pacific Life’s internal teams actively assisted in structuring and approving policy designs and an internal 1035 exchange that reset commissions and production credit while embedding prior losses into a new policy. According to the complaint, these actions were carried out using compensation mechanics long known within Pacific Life’s distribution system, including the use of 100% base coverage, an Increasing Death Benefit, and the suppression of renewable term coverage.
A central focus of the amendment is an internal 1035 exchange that replaced one Pacific Life policy with another Pacific Life policy. The amended complaint alleges that the exchange was presented to the policyholders as a corrective improvement, but in reality functioned as a reset of the compensation cycle. The replacement was approved with a 100% Commission Adjustment Factor, allowing it to be treated as fully commissionable even though the original policy had already generated substantial first-year commissions, internal production credit, and distribution bonuses within Pacific Life’s sales hierarchy.
The amended complaint further alleges that Pacific Life employees participated in preparing and approving the replacement illustrations, rollover mechanics, and compensation treatment. Rather than correcting the structural defects that caused the original policy to fail, the replacement allegedly preserved those same defects while restarting fees and commissions on the same policyholder dollars. The filing characterizes this conduct as internal churning enabled by carrier systems and oversight failures, not a one-off sales error.
In addition, the amendment provides detailed allegations regarding the economic impact of the replacement. According to the complaint, nearly $3 million was rolled into the new policy during its first two years, yet the illustrated cash surrender value declined rapidly due to front-loaded charges driven by the policy’s Target Premium, base coverage concentration, and cost-of-insurance exposure. These losses were not attributed to market performance, but to policy mechanics approved as part of the internal replacement.
The amended complaint also places the Busch transaction in a broader context. It alleges that similar compensation-intensive designs and internal 1035 exchanges are appearing in other cases under review nationwide. Of particular concern, according to the filing, is the recurring use of 100% base coverage with no renewable term, a structure that materially increases early charges and compensation while producing uniformly negative outcomes for policyholders. The complaint alleges that when such designs are approved internally with full commission treatment, the issue extends beyond suitability and raises questions about systemic incentive misalignment.
“What is new in the amended complaint is the level of Pacific Life’s direct involvement,” said Robert Rikard of RP Legal LLC. “The allegations focus on internal approval, compensation architecture, and the use of 1035 exchanges to reset commissions under the appearance of policy improvement. Those issues matter not just to the parties involved, but to the integrity of how complex insurance products are designed, replaced, and overseen.”
“This is no longer an agent-only case. We allege that Pacific Life distribution personnel actively assisted in structuring the replacement using compensation-intensive design choices the company already knows drive Target Premium and first-year commissions, specifically the use of 100% Base Coverage and an Increasing Death Benefit. Those choices are not accidental, they are compensation mechanics built into Pacific Life’s grid, said Rikard.”
“We are also actively investigating additional cases around the country involving Rodney Smith and Pacific Life that raise the same concerns,” said Robert Rikard of RP Legal LLC. “Those matters involve similar internal 1035 exchanges that appear to reset commissions and fees under the appearance of policy improvement. What we are seeing suggests this may not be an isolated transaction, but part of a broader pattern that warrants close scrutiny.”
Pacific Life has denied wrongdoing. The allegations in the amended complaint are contested and will be resolved through the litigation process.
The case remains pending in federal court.