U.S. Bank National Ass'n v. PHL Variable Life Insurance (112 F. Supp. 3d 122, 2015)

DECISION AND ORDER

McMAHON, District Judge.

The court, for its rulings in limine on the motions filed by U.S. Bank National Association (“U.S. Bank”) arid PHL Variable Life Insurance Company (“Phoenix”) (see Docket ## 179, 182 in No. 13 Civ. 1580 and Docket ## 386, 389 in No. 12 Civ. 6811), and on an untimely motion for judgment by the pleadings filed by Phoenix, (see Docket # 398 in No. 12 Civ. 6811):

I. Phoenix’s Motion for Judgment on the Pleadings

Phoenix has filed a motion for judgment on the pleadings in No. 12 Civ. 6811 seeking,, dismissal of U.S. Bank’s claim for breach of the covenant of good faith and fair dealing. I had previously dismissed an analogous claim in No. 13 Civ. 1580; applying New York law, I held that the claim was duplicative of U.S. Bank’s breach of contract claim. (No. 13 Civ. 1580, Docket # 149.) Phoenix argues that dismissal of the analogous claim in No. 12 Civ. 6811 is compelled under California law as well, because U.S. Bank’s bases for alleging that Phoenix breached the covenant of good faith and fair dealing depend on Phoenix’s having improperly exercised discretion afforded to it by the life insurance contracts at issue. U.S. Bank alleges that Phoenix failed to exercise its discretion to set COI rates in good faith by raising rates to penalize policyholders who exercised their rights to minimally fund their policies, by using COI rate increases to make policies prohibitively expensive and encourage lapses, and by using COI rate increases to manage Phoenix’s profitability at the expense of policyholders. According to Phoenix, California law does not recognize a claim for breach of the covenant of good faith and fair dealing based on one party’s exercise of discretion afforded it under a contract.

The motion is DENIED.

Phoenix misstates the applicable law. Under California law, “There is ah implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive'the benefits of the agreement.” Comunale v. Traders & Gen. Ins. Co., 50 Cal.2d 654, 328 P.2d 198, 200 (1958). “This principle is applicable to policies of insurance.” Id. Further, “The covenant of good faith finds' particular application in situations where one party is invested with a discretionary .power affecting the rights of another. Such power must be exercised in good faith.” Carma Developers (Cal.), Inc. v. Marathon Dev. California, Inc., 2 Cal.4th 342, 6 Cal.Rptr.2d 467, 826 P.2d 710, 726 (1992) (emphasis added). Thus, “where a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair, dealing.” Perdue v. Crocker Nat’l Bank, 38 Cal.3d 913, 216 Cal.Rptr. 345, 702 P.2d 503, 510 (1985) (internal quotation marks and citation omitted).

However, “The covenant of good faith is plainly subject to the exception that the parties may, by express provisions of the contract, grant the right to engage in the very acts and conduct which would otherwise have been forbidden by an implied covenant of good faith and fair dealing.” Carma Developers, 6 Cal.Rptr.2d 467, 826 P.2d at 728 (internal quotation marks and citation omitted); see also Third Story Music, Inc. v. Waits, 41 Cal.App.4th 798, 803, 48 Cal.Rptr.2d 747 (1995). That exception, in turn, is subject to its own exception. Courts will imply a covenant of 'good faith and fair dealing to cabin a party’s exercise of express contractual rights when failing to do so would render the contract itself illusory for want of consideration. Perdue, 216 Cal.Rptr. 345, 702 P.2d at 510; Third Story Music, 41 Cal.App.4th at 804-08, 48 Cal.Rptr.2d 747.

Phoenix flips these principles on their head by treating the implied covenant of good faith and fair dealing as an exception, inapplicable to any exercise of discretion under a contract unless unbounded discretion would render the contract illusory. The actual rule is that a covenant of good faith and fair dealing governs all exercises of contractual discretion except when the parties expressly‘permit certain acts that would otherwise violate an implied covenant.

Here, the insurance policies at issue unquestionable grant Phoenix discretion to set COI rates, subject to specific constraints: “We review our Cost of Insurance rates periodically and may re-determine Cost of Insurance rates at such time on a basis that does not discriminate unfairly within any class of insureds.” (Docket # 203, Ex. 2 at 12.) “No more frequent than once per year and no less frequent than once every five years, We will review the monthly Cost of Insurance Rates to determine if these rates should be changed.” (Docket # 203, Ex. 3 at 11.) Phoenix admits that these rate increases are subject to certain express conditions, including that they be based on . permissible factors and that COI rates not, exceed maximum permissible rates.

These insurance policies do not expressly permit the acts alleged in the complaint. While the policies provide Phoenix bounded discretion in setting insurance rates, there is no language suggesting that Phoenix was free to set rates 'as it pleased subject only to the express limitations of the contract. Nothing,-for example, permits Phoenix to set its rates in a. manner designed to penalize and deter policyholders from exercising them contractual rights to fund their policies minimally, or to force policyholders to let their policies lapse, or to use COI rate increases to manage Phoenix’s profitability. Nothing permits Phoenix to set rates in a manner that discriminates among policy holders who, actuarially' speaking, belong in the same class (indeed, that is expressly prohibited). Nothing suggests that Phoenix need not set COI rates in good faith.

Phoenix points to Baymiller v. Guarantee Mut. Life Co., No. SA CV 99-1566 DOC AN, 2000 WL 1026565 (C.D.Cal. May 3, 2000), as an opinion dismissing a claim that an insurer breached the implied covenant of good faith and fair dealing by increasing insurance rates. But the contract in Baymiller included language expressly permitting any rate increase “in the amount and by the method to be determined by the Company.” Id. at *1-2. Here, the policies merely state that Phoenix will periodically review and change COI rates, but will not do so in a way that does not discriminate unfairly within a class of insured and subject to the other terms of the policy that were the subject of extensive discussion in the opinion denying the motion for summary judgment. More analogous cases are those where insurance policies permit-an insurer’ to take action such as increasing premiums, and to' do so based on certain factors, but with no language absolving the insurer of its responsibility to exercise its responsibility reasonably. In those cases — where discretion exists without broad, Baymiller-like language — California courts have consistently implied a covenant of good faith and fair dealing. Acree v. Gen. Motors Acceptance Corp., 92 Cal.App.4th 385, 394-95, 112 Cal.Rptr.2d 99 (2001); Saver v. Principal Mut. Life Ins. Co., No. B147324, 2002 WL 440406, at *9-11 (Cal.Ct.App. Mar. 21, 2002). So it is here.

U.S. Bank may, of course, move for a directed verdict during the trial On the covenant of good faith and fair dealing or on any other count or counts. But now— with trial imminent — is not the time for U.S. Bank to make such a motion.

II. U.S. Bank’s Motions in Limine

A. U.S. Bánk’s Motion in Limine # 1

U.S. Bank’s first motion in limine seeks to preclude Phoenix from offering the analyses of Douglas French, Phoenix’s actuarial expert .in Fleisherthrough the testimony of Timothy Pfeifér, Phoenix’s actuarial expert in this case. U.S. Bank points to three aspects of Pfeifer’s report that it claims impermissibly adopted French’s analysis:

The COI increase class ($1 million+, ages 68/65 + ) underfunded their contracts to a much greater degree than other policyholders, as demonstrated in the September 16, 2013 Expert Report of Doug French in the related Fleisher litigation (as discussed later). (Solomon Decl. Ex. A'(Pfeifer Rebuttal Report) at 10.).

Since year-by-year data is sometimes not credible enough or more difficult to compare, the analysis performed by Douglas French in his Expert Report dated' September 16, 2013 (pages 7 — 9) illustrated clearly that on an overall present value basis, the premium flow/persistency on PAUL policies at older ages (68+) was substantially lower than the premium flow/persistency at younger ages. (Pfeifer Rebuttal Report at 28.).

On a present value basis, reflecting all years of funding, the present value of actual premiums as a percentage of the present values of CTP -is 64% at ages 68+ , compared to 82%/96% at younger ages (see French Expert Report, Page 9). Thus, it is clear that the 68 + cohort behaved substantially different than the younger cohorts.

As further evidence, the average account yalue per unit of face amount on younger lives versus ages 68 + dropped dramatically from the PAUL lib and earlier versions of PAUL to the PAUL lie through PAUL IIIc versions of PAUL. (See French Expert Report, Page 9). (Pfeifer Rebuttal Report at 35-36.)

This motion is DENIED.

The law governing this-motion is straightforward. 'One' expert is permitted to rely on facts, opinions, and data not of the expert’s own making — including analy-ses performed or findings made by another expert in the case — even if those facts, opinions, and data are otherwise inadmissible. See Faulkner v. Arista Records LLC, 46 F.Supp.3d 365, 385 (S.D.N.Y.2014); Jung v. Neschis, No. 01 CIV. 6993 RMBTHK, 2007 WL 5256966, at *16 (S.D.N.Y. Oct. 23, 2007), original report and recommendation adopted (Sept. 21, 2007); see also Eberli v. Cirrus Design Corp., 615 F.Supp.2d 1357, 1364 (S.D.Fla.2009); Wright & Miller, Fed. Prac. & Proc. Evid. § 6274 n. 50 (1st ed.) (“[T]he Advisory Committee clearly contemplated that experts can base opinions on the opinions of others”). One expert may not, however, merely adopt another expert’s opinions as his or her own reflexively and without understanding the , materials or methods underlying the other expert’s opinions. Member Servs., Inc. v. Sec. Mut. Life Ins. Co. of New York, No. 06-CV-1164, 2010 WL 3907489, at *27 (N.D.N.Y. Sept. 30, 2010).

The cases on which U.S. Bank relies are not to the contrary. -These cases establish that one expert may not rely on another expert’s opinion if the first expert is. unfamiliar with the methods and reasons supporting the second, TK-7 Corp. v. Estate of Barbouti, 993 F.2d 722 (10th Cir.1993), that an expert) cannot merely recite another expert’s opinion, Member Servs., Inc., 2010 WL 3907489, at *27, and that an expert cannot directly testify as to the conclusions of another expert. Mike’s Train House, Inc. v. Lionel, LLC, 472 F.3d 398, 409 (6th Cir.2006). None of these cases establishes that Pfeifer was precluded from considering French’s report — including- French’s opinions — together with Pfeifer’s own analysis and the facts of the case in forming an opinion. Phoenix has not demonstrated that Pfeifer failed to conduct his own analysis, merely vouched for French’s opinions, or failed to understand how French reached his conclusions.

U.S. Bank points to a laundry-list of things Pfeifer failed to- do: oversee French’s work, consult with French, ensure French properly applied his methodology to his data, and obtain and verify French’s data. These are proper subjects for cross-examination and sound like excellent bases on which U.S. Bank could impeach Pfeifer.- None of these alleged defects, however, shows that Pfeifer failed to understand French’s work or incorporate it properly in formulating his own conclusions. Pfeifer’s purported analytical shortcomings go to weight, not admissibility.

B. U.S. Bank’s Motion in Limine # 2

U.S. Bank moves to preclude.Phoenix’s actuarial expert, Pfeifer, from testifying about Phoenix’s contention in the JPTO that “U.S. Bank would have received a COI Adjustment regardless of the methodology employed by P[hoenix].” U.S. bank argues that Pfeifer may not testify to this fact because Pfeifer offered no such opinion, in either his expert report or his deposition.

This motion is GRANTED.

It is well-established that “expert testimony exceeding the bounds of the expert’s report is excludable pursuant to Rule 37(c)(1).” Advanced Analytics, Inc. v. Citigroup Global Markets, Inc., 301 F.R.D. 31, 36 (S.D.N.Y.), reconsideration denied (May 7, 2014), objections overruled, 301 F.R.D. 47 (S.D.N.Y.2014) (quoting In re Kreta Shipping, S.A., 181 F.R.D. 273, 275 (S.D.N.Y.1998) (alteration omitted)). “This result is self-executing and is an automatic sanction that is designed to provide a strong inducement for disclosure of relevant material that the' disclosing party expects to use as evidence. This duty to disclose information concerning expert testimony is intended to allow opposing parties to have a reasonable opportunity to prepare for effective cross examination and perhaps, arrange for expert testimony from other witnesses.” LaMarca v. United States, 31 F.Supp.2d 110, 122 (E.D.N.Y.1998) (internal alteration, quotation marks, and citations omitted).

Phoenix has failed to demonstrate that its ássertion about the inevitability of a COI rate increase in paragraph 30 of the JPTO — about which it intends to offer Pfeifer’s testimony — was disclosed in Pfeifer’s expert report.

Phoenix points to two statements made by Pfeifer in' response to the report of Plaintiffs expert, Larry Stem:

As Mr. Stem appears to concede, [Phoenix’s] consideration of its future expectations with respect to these factors on re-determination of rates is not constrained by its approach, methodology, or evaluation of its prior COI rate determinations. (Pflepsen Decl. Ex. A (Pfeifer Rebuttal Report) at 11.).'

After the need for a change in future expectations was determined, the Funding Ratio methodology was a mechanism developed by the company....” (Pfeifer Rebuttal Report at 20.).

The first statement has nothing to do with an inevitable COI rate increase. The fact that Phoenix could have set COI rates based on many factors, and could select which factors it would apply when re-determining rates, is different from saying that a rate increase was inevitable no matter what methodology was used.

The second statement says nothing more than this: once Phoenix decided that its existing expectations ought to be changed on a going forward basis, Phoenix developed a methodology for changing COI rates. Once again, that is a far cry from saying that a COI increase was inevitable, let alone that any other funding ratio methodology Phoenix might have adopted would have yielded an increase.

Phoenix claims that even if these statements don’t encompass the assertion in its JPTO, Phoenix should still be permitted to elicit testimony from Pfeifer about an inevitable COI rate increase because that assertion is within the scope of Pfeifer’s report and would merely provide evidentiary details.

Phoenix is incorrect. Asserting that a different hypothetical COI rate increase would have inevitably been imposed if Phoenix had adopted an entirely different set of assumptions pursuant to a different (and never employed) funding ratio methodology is an argument entirely distinct from Phoenix’s actuarial justifications for the rate increase that was actually imposed. Phoenix is trying to argue that the COI rate increase it imposed cannot be said to have caused U.S. Bank any harm— even if it was impermissible under the policies — because U.S. Bank would inevitably have suffered a COI rate increase of some kind. Phoenix points to nothing in the' Pfeifer report making any such assertion. It- simply asserts that the “actual substance and topics addressed by [Pfeifer’s] reports” include an inevitable COI rate increasé. But nothing in ■ Pfeifer’s report indicates that either he or Phoenix ever employed different assumptions to conclude that a rate increase in an equal'or greater amount to the one actually imposed was actuarially justifiable at the moment Phoenix actually increased rates using the methodology it adopted. Pfeifer’s conclusory statements about alternative scenarios are supported neither by Phoenix’s actual behavior at the time nor by Pfeiffer’s own calculation of what alternative courses Phoenix could or should have followed to' reflect its* changing 'expectations without either running afoul of the terms of thé policy or discriminating within a class'of insureds. Ph'oénix has therefore failed to establish that Pfeifer’s testimony about the inevitability of a COI rate increase is admissible.

C. U.S. Bank’s Motion in Limine # 3

U.S. Bank moves to preclude Phoenix from eliciting testimony from any witness — including Phoenix’s actuarial expert witness Pfeifer — based on the- “asset-share pricing model,” which model Phoenix did not disclose to U.S. Bank. This motion specifically identifies several documents that U.S. Bank< seeks to exclude, including Exhibit 8 to the Pfeifer Report, and Defendant’s Exhibits 35, 38-39, 42-43, 49, 52, and 55-58.

This, motion is DENIED, because Phoenix states, and U.S. Bank-, cannot deny, that Phoenix timely produced to U,S. Bank (1) Exhibit 8 to the Pfeifer Report; and (2) every other Defendant’s Exhibit identified in U.S. Bank’s motion.

Phoenix has properly characterized U.S. Bank’s argument as something akin to a “fruit of the poisonous model” argument. According to U.S. Bank, it served Phoenix with Requests for Production including “All pricing models that YOU ran or generated, at any time, for each of the POLICIES,” and “All DOCUMENTS [defined to include electronically stored information] that reflect, evidence, [or] memorialize ... any asset share calculationsf.]” U.S. Bank claims that Phoenix objected to these requests for production and never produced the asset share model or any other model. Phoenix also allegedly violated Rule 26(a)(1)(A)(ii) by failing to disclose the asset share model, which U.S. Bank characterizes as “electronically stored information ... that the disclosing party has in its possession ... and may use to support its ... defenses.” Because Phoenix never produced the underlying model, U.S. Bank asserts that Phoenix can offer no evidence that relies on the model (including the Exhibits identified above) or testimony ultimately relying on conclusions drawn from that model.

In the first place, it appears that U.S. Bank misunderstands the asset share pricing model. Phoenix notes that the asset share pricing model is a “computer program” which it used to pull data from a database, which were then analyzed by Phoenix or its experts. (Pflepsen Decl. Ex. C.) Although the program has the word “model” in its name, it does not fall within the scope of the discovery requests described above, because it is not a “model” in the sense of a set of equations or assumptions on which Phoenix priced its insurance policies. Rather, it is a tool for extracting data from an electronic data base. That is not what U.S. Bank requested.

Putting that to one side, it is undisputed that Phoenix produced every document on which it intends to rely during discovery. U.S. Bank was not precluded from deposing witnesses about these documents and could have asked any questions about how the data presented in.the documents were generated. Indeed, Phoenix’s counsel even, exchanged emails with U.S. Bank’s counsel, in which Phoenix explained that the asset share pricing model was used to produce, the data underlying Exhibit 8 to Pfeifer’s expert report. Thus, U.S. Bank had ample opportunity to question Pfeifer about what the asset share pricing model might be. It could have asked Pfeifer or any other Phoenix witness during his or her deposition about the pricing model and (for whatever it was worth) how that program extracts . data for analysis. U.S. •Bank will not be unfairly surprised if these documents are introduced at trial.

U.S. Bank has pointed to no cases holding that a party may not introduce documents because it failed to produce a computer program used to compile data presented in those ¡documents. Rather, U.S. Bank cites opinions holding that an expert’s report may be excluded when the underlying data supporting the report (for example patient records relied on by a medical expert) are not disclosed. But Exhibit 8 itself contained all the underlying data supporting Pfeifer’s report, and Phoenix’s counsel explained the calculations applied to the data pulled from Phoenix’s database. (Pflepsen Decl. Ex. C.) Phoenix was required to produce no more.

D. U.S. Bank’s Motion in Limine # 4

U.S. Bank moves to preclude Phoenix from eliciting testimony from its actuarial expert, Pfeifer, that the 2010 and 2011 COI rate increases are justified because Phoenix’s original expectations for investment earnings changed. U.S. Bank argues that Pfeifer’s testimony rests, oh a fundamentally infirm ..factual basis. U.S. Bank alleges that Phoenix, contrary to Actuarial Standard of Practice 2, has, no contemporaneous evidence about its original investment, earnings assumptions, and that all the documentation supporting Pfeifer’s report and his claims about changes in original assumptions consists of after-the-fact fabrications. Thus, according to Phoenix, Pfeifer’s opinion is unreliable and should not reach the jury.

This motion is DENIED.

“As a general rule, the faptual basis of an expert opinion goes to the credibility of the testimony, not the admissibility, .and it is up to the opposing party to examine the factual basis for the opinion in cross-examination.” Boykin v. W. Exp., Inc., No. 12-CV-7428 NSR JCM, 2015 WL 539423, at *6 (S.D.N.Y. Feb. 6, 2015) (quoting Hollman v. Taser Int’l Inc., 928 F.Supp.2d 657, 670 (E.D.N.Y.2013) (internal citations omitted)). “Mere weakness in the factual basis of an opinion bears on the weight of the evidence, not its admissibility.” Burke v. TransAm Trucking, Inc., 617 F.Supp.2d 327, 335 (M.D.Pa.2009); see also Phillips v. Raymond Corp., 364 F.Supp.2d 730, 743 (N.D.Ill.2005). “Only if the-expert’s opinion is so fundamentally unsupported that it can offer no assistance to the jury must such testimony be excluded.” Boykin, 2015 WL 539423, at *6.

Here, U.S. Bank has no objection to Pfeifer’s methodology (the basis of a valid Daubert motion), but only''to the factual basis for Pfeifer’s conclusions — i.e., the “original assumptions”, which are input for the methodology — on which Pfeifer relied. Challenges to the factual'basis for an expert’s application of an otherwise reliable methodology are quintessential jury issues. U.S. Bank is free to impeach Pfeifer or any other U.S. Bank witness by asking when and how these original assumptions were developed. It can ask whether. Phoenix- gave Pfeifer contemporaneous documentary evidence about the original assumptions and it can ask Phoenix witnesses whether any such evidence exists (classic fodder for a Request to Admit, which would then be admissible at trial). It can ask about inconsistencies between the documents supporting the “original assumptions” employed by Pfeifer and analyses performed by third parties and Phoenix itself. By doing so, it can call Pfeifer’s conclusions into question, arguing “garbáge in, garbage out.”

Nor has U.S. Bank met the high burden described in Boykin, of showing that Pfeifer’s claims are so fundamentally unsupported that they offer no assistance to a jury. U.S. Bank instead offers something of an ipse dixit — because Phoenix has no documents about its original investment assumptions that were created at the time those assumptions were made, its reconstruction of those assumptions is necessarily unreliable. But that conclusion does not follow. Memory be faulty and Phoenix may have a motive to concoct biased reconstructions, but it is perfectly possible for someone to reconstruct work previously done. There is no reason at all to believe that Phoenix could not produce reliable documentation recreating those assumptions. Whether it did- so is for a jury 'to decide.

E. U.S. Bank’s Motion in Limine # 5

U.S. Bank next moves to -preclude Constance Foster, Phoenix’s expert on insurance industry custom, practice, and standards, from offering non-rebuttal testimony. Foster was retained by Phoenix as a rebuttal expert and offered only a rebuttal report in response to. th.e report of U.S. Bank’s expert, Bruce. Foundree.

Foundree’s expert report concerns principles of fairness in the business of insurance and the application of those principles to the universal life policies at issue in this case.. He opines that fair insurance practices are governed ,by the Insurance. Marketplace Standards Association (“IMSA”), which places particular einphasis on accurate product descriptions and equal treatment within classes of insured by pricing according to mortality risk. Foundree concludes that the 2010 and 2011 COI rate increases violated these industry standards. Specifically he concludes that both increases violated industry fairness principles by impairing the insureds rights to minimally fund their policies — an essential feature of universal life policies. Foun-dree also concludes that the 2010 and 2011 increases violated industry fairness principles treating a class of insureds in a nonuniform manner and improperly increasing rates by funding value, respectively.

U.S. Bank argues that several paragraphs of Foster’s report, specifically paragraphs III(1), V, VI(1-3), (6), VII(6-8), and (16), are- irrelevant and not responsive to anything in Foundree’s report, and should there be excluded under Rules 26(a)(2)(D)(ii) and 37(c)(1).

This motion is GRANTED IN PART with respect to paragraphs III(1), V, VI(1-3), (6), and VII(16), It is otherwise DENIED.

Paragraphs III(l) and V of the Foster report discuss state regulatory review and approval processes for life insurance policies. Paragraph III(l) specifically refers to state review of policies as a means of ensuring policies are “fair[ ].” Paragraph V elaborates the state regulatory approval process in greater detail.

Both paragraphs are excluded. Although U.S. Bank has raised a claim for breach of the covenant of good -faith and fair dealing, that, claim, does not put. at issue fairness of the PAUL policies as such. Rather, the question is whether certain actions taken with respect to those policies frustrated the reasonable expectations of policyholders. Industry practices and standards are relevant to that claim insofar as they may inform what a reasonable policyholder would expect under a contract. But state policy approval processes are completely irrelevant.

Paragraphs VI(1-3), (6) and VII(16) address the life settlement market, the traditional role of insurance, and insurable interests. Paragraphs VI(l-3) assert that life insurance traditionally protects policyholders against losses resulting from the death of the insured — i.e., the concept of an insurable interest. Paragraphs VI(6) and VII(16) asserts that life settlement investment — though legal in many states— contravenes the traditional purpose of insurance.

U.S. Bank claims these paragraphs are irrelevant because Phoenix has not raised an insurable interest defense, and further argues that paragraph VI(6), concerning life settlement is “hypocritical” because Phoenix itself invested in insurance policies. Phoenix argues that these paragraphs respond to an assumption of Foun-dree’s report — that “Phoenix continued to sell policies into the life settlement/non-recourse market knowing that its standard rating assumptions did not fit life settlement/non-recourse business.”

Foundree did indeed state that he made the above assumption — he says so explicitly on pages 8-9 of his report. But Foster’s expert report is not the place to rebut that assumption, which is essentially one of fact. Foster’s argument seems to be (it is not completely clear) that because life settlement investment is non-traditional and the policyholders therein have no insurable interest in the named insureds, Phoenix did not know it was selling to that market. This inference itself is absurd. But it is, in any case, not the province of an expert. From what I know of the evidence, it seems obvious that-Phoenix knew it was selling policies into the life settlement market, but if Phoenix wants to contest that fact then it should use its fact witnesses — those familiar with Phoenix’s business practices — to do so. Paragraphs VI(1-3), (6) and VII(16) are excluded.

Paragraphs VII(6-8) of Foster’s report discuss the National Association of Insurance Commissioner’s Model Act for unfair trade practices. Foster opines that the Act was designed to provide comprehensive state legislation addressing unfair insurance practices, but that the act was only designed to protect individuals and not businesses that use life insurance as an investment vehicle. U.S. Bank asserts that those paragraphs are completely irrelevant to the issues to be tried in this case. Phoenix claims that these paragraphs respond to Foundree’s amorphous IMSA standards of fairness by describing the specific statutes that govern 'fair insurance practices and showing that those statutes do not call into question Phoenix’s practices.

The argument Foster is aptually making is not well-described by Phoenix. Foster’s discussion of the NAIC Model Act follows her opinions that (1). life settlement-investment is not a traditional function of insurance; and (2) IMSA standards are defunct and inapplicable to Phoenix’s. actions. Foster concludes — as I read her report— that the NAIC Model Act better reflects governing industry standards, and that under the NAIC, Phoenix did nothing wrong because those standards do not protect life settlement investors.

U.S. Bank’s motion with respect these paragraphs is denied. Foundree has argued that one set of standards informs the reasbnable expectations of policyholders and insurers. Foster has argued for a different set of standards derived from the NAIC Model Act. It does not matter that the Model Act is not the governing law of this case because Foster does not present it as such. Rather, she argues that the Model Act réflects industry .practices, which are relevant to U.S. Bank’s claim for breach of the covenant of good faith and fair dealing. Any risk of jury confusion can be easily cured by an instruction about the limited purpose of this opinion testimony.

F. U.S. Bank’s Motion in Limine # 6

U.S. Bank’s sixth motion in limine asks the court to preclude Phoenix from eliciting “expert” testimony from witnesses it did not identify as expert witnesses. U.S. Bank identifies nine fact witnesses — eight Phoenix employees and one consultant for Towers Watson — who it claims Phoenix will use to introduce improper expert testimony. The testimony identified includes several of Phoenix’s contentions in the JPTO as well as over a dozen designated portions of these witnesses’ depositions.

The Federal Rules of Civil Procedure distinguish three categories of witnesses. Fact witnesses “must be disclosed by sending to the opposing party the name, address, and phone number (if known) of each potential witness.” Musser v. Gentiva Health Servs., 356 F.3d 751, 756 (7th Cir.2004); see Fed.R.Civ.P. 26(a)(1). The Rules distinguish two categories of expert witnesses. For all expert witnesses, a party, must disclose “the identity of [the] witness.” Fed.R.Civ.P. 26(a)(2)(A). For expert witnesses retained by a party for the purpose of providing expert testimony the disclosure “must be accompanied by a written reportf] prepared and signed by the witness” containing several categories of information. Id. R. 26(a)(2)(B). For all other expert witnesses a party must disclose the subject matter of the witness’s expert testimony and a summary of the facts and opinions to which the witness is expected to testify. Id. R. 26(a)(2)(C).

However, “Where a person’s profession necessarily involves scientific, technical,! or specialized knowledge — for example, because the person is a physician or an actuary—the line between ‘expert’ and ‘lay’ opinion may be difficult to draw.” Transamerica Life Ins. Co. v. Lincoln Nat. Life Ins. Co., 255 F.R.D. 645, 657 (N.D.Iowa 2009). The line depends, not on the witness’s identity or capacity to give expert testimony in the abstract, but on the proposed testimony. “Thus, a treating doctor (or similarly situated witness) is providing expert testimony if the testimony consists of opinions based on ‘scientific, technical, or other specialized knowledge’ regardless of whether those opinions were formed during the scope of interaction with a party prior to litigation.” Musser, 356 F.3d at 757 n. 2. By contrast, “To the extent a treating physician limits his or her testimony to the patient’s care and treatment, the physician is not specially retained despite the fact that the witness may offer opinion testimony under Fed.R.Evid. 702, 703, and 705.” Navrude v. U.S. (USPS), No. C01-4039-PAZ, 2003 WL 356091, at *7 (N.D.Iowa Feb. 11, 2003) (quoting Starling v. Union Pacific R.R. Co., 203 F.R.D. 468, 477 (D.Kan.2001) (internal quotation marks omitted)).

It is undeniable that Phoenix did not disclose any of these nine witnesses as experts as Rule 26 requires. Thus, the admissibility of these witnesses’ testimony depends entirely on whether that testimony is expert testimony. See Fed.R.Evid. 701, 702.

I agree with Phoenix that Rule 702 permits lay witnesses to offer opinion testimony (as opposed to expert testimony), provided there is a proper foundation for the introduction of such testimony. I will not preclude. Phoenix from eliciting such opinion testimony — certainly not on a motion; in limine, without having .the opportunity to hear a single, actual question or to have a foundation laid for the propriety of such testimony. No less than treating physicians, a person who has worked in the insurance industry for 20 or 30 years has undoubtedly developed a certain degree of expertise and has opinions that may be relevant to explaining his or her behavior or the behavior of the company. It, is entirely possible that Phoenix could elicit some opinion testimony from such.an individual with perfectly proper, questioning, and that this opinion testimony would not be expert testimony, but lay opinion testimony. It is not, however, an issue that can be decided in a vacuum.

So while U.S. Bank is correct that these nine witnesses may not be qualified and testify as expert witnesses, Bharucha v. Holmes, No. CIV. 09-5092-JLV, 2010 WL 1878416, at *3 (D.S.D. May 11, 2010); Transamenca Life Ins. Co., 255 F.R.D. at 658, I am not going, to preclude them from offering testimony otherwise admissible under. Rules 702, 703 and 705. Furthermore, at least one of the Towers .Watson witnesses — Thomas Buckingham- — is the author of a report (Defendant’s Exhibit 75), prepared just prior to the imposition of. the 2010 COI increase, in which Towers Watson provides actuarial justification for that increase. The existence of the report is a fact, and if Phoenix relied on its contents in deciding whether to impose the 2010 COI rate increase, that, too, is a fact — not an opinion at all. Indeed, Buckingham and his report would appear to be critically important fact witnesses for Phoenix, and this court will certainly not be precluding that .testimony — it is precisely analogous to the testimony of a Seating physician in a personal injury case.

Since it is undoubtedly the case that Buckingham has a great deal of relevant testimony to offer, I DENY the motion in limine to preclude his testimony. If Phoenix seeks to introduce impermissible expert testimony through any other witness, U.S. Bank can call its objection to my attention at trial, and I will issue a ruling on a question by question basis. Without in any way constraining myself (since I refuse to rule on this in a vacuum), I offer these guidelines, based on the disputed claims in the JPTO, to guide the parties about how I will rule at trial.

Phoenix’s fact witnesses may. testify about the following issues:

— Their reasons for increasing COI rates and what purported actuarial justifications underlay those reasons.

— How the CIO rate increases affected particular policyholders (for example whether the same methodology was in fact applied to each policyholder).

— The economic consequences to Phoenix of refraining from imposing a COI rate increase for its policyholders.

— How the rise of life settlement investors and changed policyholder behavior affected Phoenix’s profitability and average policy funding.

— Anything having to do with advice they actually provided to Phoenix during the rate — setting process.

Phoenix’s fact witnesses may not testify about the following issues:

— The meaning of actuarial standards of practice.

— The aetuarially proper interpretation of insurance terms of art such as “class of insureds.”

— Whether the COI rate increases did or did not constitute unfair discrimination.

G. U.S. Bank’s Motion in Limine # 7

U.S. Bank moves to preclude Phoenix from (a) disparaging U.S. Bank/Fortress, or Lima for investing in life insurance policies; and (b) disparaging those entities for investing in distressed assets. U.S. Bank claims that evidence regarding life settlement investment and investment in distressed entities is irrelevant to , any issue at trial and would serve only to inflame the jury’s passion and encourage it to render a verdict out of distaste for U.S. Bank’s business model. ' '

This motion is GRANTED IN ’PART and DENIED IN PART.

It is first necessary to distinguish.STO-LI evidence — which is not relevant to this case — from life settlement investment, which might be.

A STOLI policy is a life insurance policy, generally with a large face amount, that is procured for the purpose of selling it to investors who have no insurable interest in the life of the insured. Nonetheless, the investors agree to fund the premiums during the life of the insured in exchange for receiving the proceeds of the policy when the insured dies. The life settlement industry has grown, in part; bn securitizing such investments.

Historically it was illegal to procure insurance without an insurable interest, and many states — recognizing the financial realities of a STOLI transaction — liave’ declared STOLI policies void for precisely that reason. See Susan Lorde Martin, Betting on the Lives of Strangers: Life Settlements, STOLI, and Securitizations, 13 U. Pa. J. Bus. L. 173 (2010). In other words, evidence or rhetoric relating to the idea that there is an entire industry built on profiting from death is highly prejudicial — so prejudicial that the very idea of it has been declared void for public policy in many states.

However, in its wisdom, the New York Court of Appeals has declared that STOLI transactions are legal in New York. Kramer v. Phoenix Life Ins. Co., 15 N.Y.3d 539, 545, 550-53, 914 N.Y.S.2d 709, 940 N.E.2d 535 (2010). The prejudice from the inflammatory rhetoric U.S. Bank seeks to preclude necessarily outweighs the probative value of information about the STOLI industry — information that a jury would undoubtedly find distasteful (as indeed does this court, see, e.g., United States v. Binday, 908 F.Supp.2d 485 (S.D.N.Y.2012); RCX I, LLC v. Pitter-Nelson, No. 11 CIV. 03513 CM, 2014 WL 5809514, at *1 (S.D.N.Y. Nov. 6, 2014)), and which perforce results in prejudice that does not derive from proof relevant to the issues in the case — the very sort of prejudice against which Rule 403 guards. -

Magistrate Judge Francis previously found that, “the circumstances surrounding the origination of [U.S. Bank’s] policies are only relevant if PHL intends to assert a STOLI defense and claim that the. policies are void or voidable ... Unless the defendant affirmatively asserts a STO-LI defense, the circumstances surrounding the origination of the policies are not relevant to this case.” US Bank Nat. Ass’n v. PHL Variable Ins. Co., 288 F.R.D. 282, 286 (S.D.N.Y.2012) (emphasis added). I agree with his conclusion. The jury will not be informed about the origination of STOLI policies or the many, nefarious schemes that have cropped up as a result.

But that does not mean that all evidence about U.S. Bank’s investment practices is irrelevant. Phoenix has offered as an actuarial justification for the COI rate increases the fact that its investment expectations changed. And those expectations changed, according to Phoenix, because life settlement investors entered the market and funded their policies at lower levels. The issue, in other words, is whether the behavior of the sophisticated investors who purchased large numbers of PAUL policies with certain characteristics fundamentally altered Phoenix’s expectations in a manner that rendered the rate increases actuarially sound. To understand that claim, the jury will, of course, need background about- life settlement practices— i.e., purchasing and bundling life insurance policies as an investment vehicle.

The jury can easily be told that investors were unexpectedly acquiring PAUL policies (which is a perfectly legal event in New York), and Phoenix’s witnesses can explain that those investors were less likely to take advantage of certain features of the PAUL policies (notably those relating to funding) without in any way being apprised of the fact that investors were doing things like soliciting impoverished elderly individuals to set up insurances trusts so they could acquire policies they could not afford, and that brokers were providing insurance companies with false information about potential named insureds — the seamier side of the STOLI industry, with which, sadly, this court is all too familiar. I thus grant U.S. Bank’s motion to thé extent that it seeks to bar inflammatory rhetoric about the life settlement industry. References to “death profiteering” or “inequitable conduct” of using life insurance as an investment clearly fall into this category. Phoenix should only test this ruling to the extent it seeks a mistrial and sanctions against it and its counsel personally.

However, Phoenix must be permitted to provide dry comparisons of differences in the expected behavior of traditional insureds as opposed to investor — owners such as U.S. Bank. It will not be prevented from arguing at trial that it was not Phoenix that blindsided U.S. Bank with a rate increase, but U.S. Bank who blindsided Phoenix with behaviors other than what Phoenix had expected, thereby resulting in legitimate actuarial changes.

With respect to investment and distressed assets, U.S. Bank’s motion is granted. Phoenix contends in the JPTO that Fortress is an “opportunistic credit investor,” which viewed the seller of the insurance policies at issue as a “distressed seller of an undervalued asset” and that U.S. Bank “violated equitable standards of conduct” by opportunistically investing in undervalued insurance policies. JPTO ¶¶ 38, 39, 71. These statements are unrelated to any legitimate defense Phoenix could raise in this lawsuit.

Phoenix claims that this evidence is relevant for the same reason life settlement evidence is relevant — that it establishes changes in policyholder behavior which contravened Phoenix’s original ' assumptions and led to reduced investment earnings. That is not so. Phoenix needs only to explain the changes in policyholder behavior and — it can reasonably be said— explain that the changes in behavior arose from treating life insurance as an investment. But Phoenix need not get into the ultimate investment philosophy of those behind the life settlement investments held by U.S. Bank. It is of no assistance to a jury to know that Fortress chooses to invest in other distressed assets, or that life settlement investment was part of its philosophy of searching for undervalued assets. This evidence is therefore excluded under Rule 401 (irrelevant) and Rule 403 (probative value outweighed by unfair prejudice).

III. Phoenix Life’s Motions in Limine

A. Phoenix’s Motion in Limine # 1

Phoenix moves to exclude Plaintiffs Exhibits ## 32, 37, 38, 114, 129, 149, 158, 175, 176, and 177, all of which are either (1) communications between Phoenix and its reinsurers or outside consultants, or (2) internal communications from Phoenix’s reinsurers or outside consultants. Phoenix objects to these exhibits on various grounds, described below, including hearsay, relevance, and Rule 403. Phoenix also seeks by this motion to exclude the testimony of Jack Gibson, Towers Watson’s corporate representative.

This motion is GRANTED IN PART and DENIED IN PART.

1. Communications with Reinsurers

Exhibit 149 is an email exchange between Phoenix and its reinsurer describing the 2010 COI rate increase. Phoenix’s representative- states expressly that “a policy can have different coi increase [sic] each month” and that CO rate increases “depend[] on the relationship between fund, .value and ‘threshold fund .value.’,” Thus, Exhibit 149 is relevant because it tends to show that Phoenix targeted policyholders who funded their policies minimally which, at least, is probative evidence that Phoenix breached the covenant, of good faith and fair dealing. There is no merit to Phoenix’s response that this document would require the jury to understand the differences between reinsurance and primary insurance markets.

Exhibit 87 is an internal email exchange among employees of the Reinsurance Group of America (“RGA”), one of Phoenix’s reinsurers. In one of the emails, an RGA employee states that Byron York of Phoenix told him “the COI increases are not mortality related,.but funding related.” The email exchange is relevant because it tends to refute one. of Phoenix’s actuarial justifications for the 2010 rate increase.

Phoenix objects that the email exchange is double hearsay. There are indeed two possible levels of hearsay. The outer level is emails by RGA employees, who are not parties. The inner level is purported statements by Phoenix employees as repeated'by the RGA employees in their emails., Double hearsay is admissible only if each level of hearsay is independently admissible as an exception.to the, hearsay rule. See Fed.R.Evid. 805. Rule 805’s requirement is satisfied here.

The statements by non-party RGA employees fall within the ■■business records exception. RGA’s Vice President and Assistant General Counsel — who acts as the custodian of records — certified that these emails satisfied all the criteria for business records. See Asudulayev Decl. Ex. C; Ard 4/21/15 Deck Ex. 1 in Fleisher; see also Fed.R.Evid. 803(6). Phoenix has “not show[n] that the source of information nor or the method or circumstances of preparation indicate a- lack of trustworthiness.” Fed.R.Evid. 803(6)(d).

The inner or second level of hearsay consists of statements of Phoenix employees quoted in the emails. These qualify, as party admissions. The employees were agents of Phoenix discussing COI rate increases with their reinsurer. On their fact, the statements were made within the scope of the declarants’ employment.

The double-hearsay issue in this case is similar to the issue before the court in Rodriguez v. Modern Handling Equip. of NJ, Inc., 604 F.Supp.2d 612 (S.D.N.Y.2009). In Rodriguez, the plaintiff was a forklift operator who sued, among others, a company which he alleged had repaired a forklift that injured him on the job. The defendant company sought to admit two reports, one by ÓSHA and the other by a private workers’ compensation insurance carrier, about the accident. Both reports concluded that the defendant had not repaired the forklift that caused the plaintiffs injury. The plaintiff objected that both reports included double hearsay.

The court held that the OSHA report was admissible. The report itself “ha[d] been authenticated .as a business record under Federal Rule of Evidence 803(6) by the custodian of records for the Tarrytown Area OSHA office.” Id. at 622. The report contained an interview with the plaintiff which “would constitute double hearsay.....” Id. The court held, however, that “Since plaintiff is a party to the lawsuit ... his statements in the OSHA report ... may come in as a non-hearsay party admission under 801(d)(2)(B).” Id.

The private insurer’s report, like the OSHA report, was a business record, admissible under Rule 803(6). That report, however, contained statements by non-parties, which were not admissible as non-hearsay or as a hearsay exception. Thus, the court did not admit the insurer’s report. Id.

In this casé, Exhibit 37 is identically situated to the OSHA report — it’ is a record created and maintained in the ordinary course of RGA’s business and it contains party admissions. It is, therefore, admissible.

Exhibit 38 — entitled “Trip Notes” — is a summary of a visit by RGA employees to Phoenix during which various topics were discussed. The.visit was obviously taken in the regular course of RGA’s business, and Phoenix employees were .speaking within the scope, of their employment during that visit. The notes record that Phoenix representatives told their RGA counterparts that, “Funding expectations were not being met and this is driving COI increase, not lapse, or mortality.” That statement is relevant because it tends to refute Phoenix’s mortality-related or other actuarial justifications for the 2010 COI rate increase. As with Exhibit 37, Exhibit 38 itself has been certified as an RGA business record. The statement contained in the exhibit by a Phoenix employee is a party admission. Exhibit 38, like Exhibit 37, is not inadmissible hearsay.

2. Towers Watson

Exhibit 32 is an internal Towers Watson email from October 26, 2009. The email advises a client — riot Phoenix — about the life settlement industry and cost of insurance fate changes; In particular, Towers Watson advises the client that although there is no formal definition of a “class,” éach insurance plan is typically-.its own class -and an insurance carrier cannot define a subset of a plan as a class or increase COI rates on a policy-by-policy basis.

I agree with U.S. Bank that this evidence is relevant. Whether Phoenix defined a’ class properly in increasing COI rates is a central question in. this case. But- the actuarially proper definition of a class is almost exclusively the province of the expert witnesses. Towers Watson, retained as a consultant by Phoenix, might well be qualified to offer an expert opinion. But Towérs Watson is a fact witness here; it has not been' identified as an expert. The conclusions presented iri 'Exhibit 32 are only bare conclusions. They come with no supporting factual or actuarial analysis. Thus, introducing this exhibit would allow U.S. Bank to, in effect, present untested expert opinions to the jury. For that reason, Exhibit 32 will not be admitted.

Phoenix also seeks to exclude the deposition testimony of Jack Gibson — Towers Watson’s 30(b)(6) corporate representative — on the basis that Gibson is within the court’s subpoena power (and thus his deposition designations cannot’ be used at trial) and that the testimony Ú.S. Bank would seek to elicit from Gibson is irrelevant.

U.S. Bank responds that it intends to call Gibson only in rebuttal in the event that Phoenix introduces Defendant’s Exhibit 75. That exhibit is a letter and enclosed- report from Towers Watson to Phoenix regarding the 2010 COI rate increase. The report provides some actuarial support for the COI rate increase. U.S. Bank has’ hot objected to this exhibit in the Final Pre-Trial Order; which means it will be admitted without .objection at the Final Pre-Trial conference, where the court deals with all objections to the admissibility of documents.

U.S. Bank is correct that the designated portions of Gibson’s deposition are relevant; they could be used to discredit the conclusions in Defendant’s Exhibit 75 by showing that Towers Watson’s limited engagement either failed to consider important relevant issues or else rested on flawed assumptions or ‘ bad ’ information provided by Phoenix. However, as Gibson is within the court’s subpoena power, he must be subpoenaed and come to court to testify; his non-party deposition testimony would only be admissible if her were beyond the subpoena power of the court'. I note that Gibson is on Phoenix’s witness list as well; I insist that witnesses testify only once, so if Phoenix calls Gibson, U.S. Bank can elicit its rebuttal testimony from him on cross examination, even if the cross goes beyond the scope of the direct. ■

3. PricewaterhouseCoopers Documents

Phoenix also seeks to exclude Exhibits ## 114, 129, 158, 175, 176, and 177, all arising from PricewaterhouseCoopers’ (“PwC”) engagement as Phoenix’s financial auditor. Phoenix objects to these documents as (1) irrelevant; (2) inadmissible double hearsay; and (3). likely to confuse and mislead the jury.

Exhibits 114, 129, 158, 175, and 176 are all actuarial memoranda filed by PwC. Exhibits 114, 129, and 158 describe declining sales of PAUL policies and/or declining fund balances attributable to the economic downturn. Those facts tend to disprove Phoenix’s actuarial justification for the 2010 COI rate increase. Phoenix asserts that the particular policies subject to COI rate increases caused a decline in investment earnings, but these Exhibits tend to show that any change investment earnings had more general economic causes not attributable to particular policies. Declining sales also show Phoenix’s ’motive for changing CIO rates — to recover from the financial hit it at taken — and. motive- is always a relevant issue even if not part of a cause of action.

Exhibit 175, a 2006 actuarial review memorandum, states that there were “exceptionally high sales of ... PAUL ... policies issued at age 70 and above,” which were attributable to sales to life settlement investors; That statement tends to refute Phoenix’s claim that its original assumptions changed, because U.S. Bank can argue that Phoenix expected low funding levels and life settlement investment from the inception of the PAUL policies.

Exhibit 176, a 2007 actuarial review memorandum, describes a significant increase in “financed” sales. It also refers to Phoenix boosting its reserves in lieu of increasing COI rates, which tends to show that Phoenix knew its sales would be unprofitable without á later rate increase. This fact is relevant to U.S. Bank’s “bait and switch” claim that Phoenix breached the covenant of good faith and fair dealing by selling policies to life settlement investors — knowing that it would later suffer losses because of low prices — and recouping the losses by raising rates after the policies were sold. •

Exhibit 177, an email' exchange between Robert Lombardi of Phoenix and a PwC representative, contains statements by Lombardi which could be interpreted to mearl that Phoenix’s original premium per-sistency assumptions were being met for certain PAUL policy blocks. This, in turn, is relévant to show whether there was an actuarial justification for isolating particular policies within policy blocks and subjecting them to rate increases.

None of these documents appears to be hearsay. The actuarial memoranda appear to satisfy the first three criteria of Federal Rule of Evidence 803(6): contemporaneous authorship, records kept in the regular course of business, and a regular practice of making, records. Further, U.S. Bank states in its opposition memorandum that PwC will issue a Rule 902(11) certification that the Actuarial Review Memo-randa satisfy the business records exception. I rather imagine the documents so qualify.

Phoenix, claims that there is a second level of hearsay in these documents, but it is not clear where. No document written by PwC witnesses purports to summarize statements by anyone from Phoenix (unlike the RGA documents described immediately above) or to quote from any other document.

Phoenix has pointed to nothing in any of these emails or actuarial memoranda indicating lack of reliability. Although one memorandum, Exhibit 129, is a redline draft memorandum, U.S. Bank states that it will only introduce the final language at trial. In any event, the preliminary and allegedly incomplete nature of the reports goes to weight, not admissibility. Matter of Beery, 680 F.2d 705, 718 (10th Cir.1982); Matador Drilling Co. v. Post, 662 F.2d 1190, 1199 (5th Cir.1981); DL v. D.C., 820 F.Supp.2d 27, 30 (D.D.C.2011).

As for authorship, “[I]t is irrelevant” for purposes of Rule 803(6) “that the face of the [document] does not identify the document’s author.” JPMorgan Chase Bank, N.A., v. Yuen, No. 11 CIV. 9192 NRB, 2013 WL 2473013, at *6 n. 15 (S.D.N.Y. June 3, 2013), appeal dismissed (Aug. 20, 2013) (citing Saks Int'l, Inc. v. M/V Export Champion, 817 F.2d 1011, 1013-14 (2d Cir.1987) (admitting tallies prepared by the “unidentified employees” of a company that provided the records to the testifying entity)). As long as the other predicates for admitting a document as a business record are satisfied, the failure to identify the author, or even the fact that a document was authored outside a company and later incorporated into its records, affects only the document’s weight and not admissibility. Id. at *6; see also United States v. Soape, 163 F.3d 1354 (5th Cir.1998); Matador Drilling Co., 662 F.2d at 1199.

Phoenix also argues that the probative value of these documents is outweighed by their prejudicial effect and potential to waste time. I disagree. Indeed, I think these documents have a great deal of probative potential — which is probably why Phoenix wants to keep them out of evidence. Unless Phoenix can identify otherwise inadmissible hearsay at the time of the final pretrial conference, they are all admitted.

B. Phoenix’s Motion in Limine # 2

Phoenix’s moves in limine to exclude evidence from state regulatory proceedings concerning, .the. COI rate increases. Phoenix raises various objections to specific exhibits and related testimony including that certain evidence should be excluded: [1] as irrelevant; [2] under Rule 403; [3] because it contains inadmissible hearsay; and [4] under Rule 408, as it results from efforts to compromise, settle, or negotiate resolutions to state inquiries.

The motion is GRANTED IN PART, specifically as to Exhibits 33, 44, 44A, and 71. It is DENIED as to the remaining exhibits.

Exhibit 4 is an email sent by a Phoenix representative to the New York State Insurance Department with an attached cover letter and attached marketing materials. Phoenix objects only .to the attached cover letter, which U.S, Bank has withdrawn. The email itself, and the remaining attached marketing materials are admitted without objection.

Exhibit 8 is an email from Byron Frank, a Vice President of Phoenix. It describes how COI rates were calculated before and after the 2010 COI rate increase and compares the results for two specific policies. Obviously this document provides helpful background for every claim, as all' claims require the jury to understand the 2010 COI rate increase. The court cannot discern how this party admission could possibly be unfairly prejudicial or cause confusion, or waste the jury’s time. ■ There is no basis for excluding it.

Exhibit 33 is an email from the California Department of Insurance (“CDI”) to a Senior VP of Phoenix. The letter states that a complaint filed against Phoenix relating to the 2010 COI rate increase was “justified” because the rate increase unfairly discriminates and violates the express terms of the PAUL policy. The letter specifically concludes that funding ratio is an improper basis for risk classification because it is not related to risk of loss. This Exhibit is plainly relevant but also highly prejudicial. The letter—though based on factual findings by the CDI—offers a legal conclusion on the ultimate issues in the case. It does not relate the factual