Federal judge U.S. District Court Judge Janet Hall gave preliminary approval to a settlement under which The Hartford Financial Services Group Inc. will pay $72.5 million to a group of claimants alleging the insurer engaged in fraudulent practices in settling various injury claims.
Hall’s move will affect 21,000 people nationwide, and is designed to resolve the class action lawsuit. It was announced Monday by the plaintiffs’ attorneys.
The Hartford, which did not admit to fraud as part of the settlement, maintained that the claimants received the promised amounts they were due. The greater press, including the Associated Press, reports that the company “settled to avoid the uncertainty and cost of continued litigation.”
The settlement affects claims dating to 1997 involving car accidents, workers compensation and other injuries. The 21,000 people are expected to receive an average of about $3,300 each of the settlement. At issue were structured settlements (payments made over time) and funded with annuities. In the suit, the plaintiffs alleged The Hartford engaged in fraudulent settlement practices by deducting up to 15% of the value of their settlements in undisclosed annuity costs.
The Hartford, which disclosed the settlement in its first quarter earnings report, continues to rise above financial woes. In April, the company announced a reorganization as it repaid $3.4 billion in TARP funds to the U.S. Treasury.
In April, The Hartford Financial Services Group Inc. noted plans to revamp its annuity lineup and target business owners as part of an initiative to develop its wealth management business. The strategy includes expanding its assets under management by better aligning its two companies, Hartford Life and Hartford Property and Casualty. It announced it would change its dual-silo structure so Hartford acts as one company with three consumer divisions: commercial markets, consumer markets and wealth management.
Early morning trading of its shares at $25.25 is down .25 from Tuesday’s close, but up from midday trading reported yesterday at $24.92.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access