Two of the credit union industry's big names in insurance are tangled up in a legal battle over allegations of defamation, unfair marketing practices and attempts to steal customers, according to a lawsuit filed in Wisconsin circuit court on July 26. 

According to the complaint, the beef between Madison, Wis.-based CUNA Mutual Group and East Windsor, Conn.-based Insuritas revolves around a July 20 article with the headline “CUNA Mutual Group Leaves Credit Unions Behind in Shift to Direct-to-Consumer Strategy” that Insuritas allegedly authored and posted on its website. It claimed CUNA Mutual Group and its subsidiary, TruStage, have failed to tell credit unions that TruStage offerings are no longer just for members only.

“TruStage has recently carefully added language throughout their consumer-facing website noting that many of the products they offer are no longer tied to credit union membership, yet have allowed their credit union partners to continue to promote the TruStage program as an exclusive benefit for credit union members,” the post claimed. “In fact, the website you may be directing your members to today educates your members on the fact that they can take advantage of TruStage products regardless of their current or potential membership in your credit union.” 

“TruStage leverages your member data for their use — not yours. This shift represents a breach of trust between CUNA Mutual Group and the credit union movement,” it also alleged.

In its court complaint, which asked for unspecified damages, CUNA Mutual Group strongly denied the claims.

“The TruStage Insurance Program provides Accidental Death and Dismemberment insurance, covering credit union members, exclusively to participating credit unions,” CUNA Mutual explained. “It also provides exclusive discounts to credit unions for automobile and home insurance. The assertion that the TruStage Insurance Program does not offer exclusive benefits to credit union members is flat out false.”

In a statement to CU Times, CUNA Mutual Group spokesperson Phil Tschudy said Insuritas's statements were malicious and were intended to harm its contractual and customer relationships.

“Of particular concern is the assertion in the article that, through the TruStage Insurance Program, CUNA Mutual directly competes with credit unions. That is false,” he told CU Times. “TruStage has continued to expand its media to reach members and potential members about the availability of these financial products. In the consumer marketing CUNA Mutual does through TruStage, credit union customers are compensated based on sales to their members. Any policy sold to a credit union member increases the value of that credit union's endorsement of the TruStage Insurance Program, resulting in additional royalty income to the credit union.”

CUNA Mutual Group said it wants Insuritas to take down the post, publish a retraction in its place and send retractions to every credit union that received an emailed copy from Insuritas, according to the complaint. 

Insuritas CEO Jeffrey Chesky said he simply wants CUNA Mutual Group to acknowledge that TruStage isn't a members-only proposition anymore. He is undeterred by the suit against his company and the fact that the suit names him personally.

“We suspect this is just their latest attempt to stop credit unions from owning their own insurance agencies,” he told CU Times. “The issue is too important and our credit union clients, their five million plus members, aren't going to be intimidated by a lawsuit that complains about the fact that we're exposing the facts about the move that CUNA has made.” 

Chesky also said some credit unions have become concerned about the language on their own websites.

“You have obligations as a financial institution to be very clear about what is available to your member and frankly we're surprised that CUNA Mutual, through its behavior, may be exposing credit unions to UDAAP reviews,” he said.

“All I know is I wouldn't want to be dealing with the insurance and financial services commissioner in New York, California, Texas, Florida, Illinois,” he noted. “They have no patience for what they might deem as advertising claims that are not accurate.”

Chesky said CUNA Mutual Group has been a positive force in the credit union movement for decades. “They just made a tactical mistake and rather than owning up to it and being transparent with the credit union movement, now they're trying to, I don't know, they don't want to talk about it. They want to point fingers at us,” he said. “Like I say, that's okay. We're going to continue our fight and continue to grow.”