Insurance and Finance Update - Monday, July 26, 2010 10:00 - 0 Comments

Hartford To Pay $72.5 Million To Settle Class-Action Lawsuit

A federal judge in Connecticut has granted preliminary approval to a $72.5 million settlement in a national class-action lawsuit alleging Hartford fraudulently kept millions in fees that should have gone to accident victims. The 2005 case involves Plaintiffs who were injured and eligible for either personal injury or workers’ compensation claims from The Hartford Financial Services Group. Plaintiffs alleged that Hartford fraudulently underpaid personal injury and workers’ compensation claims. Instead of receiving a lump sum, the insurer paid “structured settlements,” which are payments over time. Annuities are typically used to provide the payments. The annuities in this case were provided by Hartford Life, the property-casualty insurer’s life-insurance division. It was alleged that Hartford would tell people the value of a settlement, but would not mention that the company would take at least 15% for fees, taxes and profit.

According to the federal court, the settlement was “fair, reasonable and adequate” to the more than 21,000 claimants. The court has scheduled a hearing for September 21st to consider final approval of the settlement.

Source: Hartford Concurrent