NU Online News Service
A federal judge granted preliminary approval of a $72.5 million settlement between The Hartford Financial Services Group Inc. and a class of more than 21,000 people who alleged the insurer underpaid personal injury and workers' compensation claims.
Each member of the class will receive about $3,300 before the payment of fees and expenses, according to Carl S. Kravitz of Zuckerman Spaeder, who served as one of the attorneys in the class-action suit.
The matter has been litigated for about five years, according to court documents.
"[The] agreement is fair, reasonable and adequate to all members of the settlement class," wrote U.S. District Court Judge Janet Hall in Hartford, Conn.
Final approval is scheduled for Sept. 21.
The Hartford paid personal injury and workers' compensation claims with a structured settlement – an amount paid over time instead of at once. The suit alleges these types of payments are normally funded with an annuity from a life insurance company. In this instance, according to the suit, the annuity was purchased from The Hartford's life insurance subsidiary, which allegedly kept 15 percent of the value of the settlement for The Hartford. This allegedly shortchanged its claimants.
"We are confident that every claimant received the amount specified in the structured settlement agreements and are settling to avoid the uncertainties and costs of continued litigation," said The Hartford spokesman Thomas Hambrick.
The Hartford disclosed an agreement to settle the class-action lawsuit in its first quarter earnings report. An after-tax charge of $47 million was reflected in the company's financial results.
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