The Hartford to settle case over annuity payments for $72.5 million
By IFAwebnews Staff
Insurance And Financial Advisor
June 21, 2010
Connecticut-based The Hartford has received preliminary approval on a settlement to pay $72.5 million to resolve a class action suit accusing the firm of keeping millions in fees that should have been distributed to 21,000 accident victims.
The Hartford Courant reported that a federal judge in Bridgeport, Conn., granted the initial approval to settle the national lawsuit that dates back to 2005. The suit involved plaintiffs injured and eligible for personal injury or workers' compensation claims from The Hartford Financial Services Group, according to the report.
Rather than receiving a lump sum, the Courant reported, The Hartford paid "structured settlements," or payments over time with annuities typically used to provide the payments through its life insurance division, Hartford Life.
According to the report, The Hartford told these individuals the value of the settlement, but neglected to mention it would take at least 15% for fees, taxes and profit, the lawsuit alleged and The Hartford denied.
A spokesman for the insurer told the Courant it is "confident" each claimant received the amount specified in structured settlement agreements, and is settling the suit "to avoid the uncertainties and costs of continued litigation."
Each of the more than 21,000 claimants in the class action suit will receive about $3,300 before lawyer fees and expenses, according to the plaintiff's law firm.
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