Posted on 28 Sep 2010
A federal judge in Connecticut has given her final approval of a $72.5 million settlement involving The Hartford Financial Services Group in a suit that was brought against the insurance group by more than 21,600 people. The suit alleged that The Hartford underpaid personal injury and workers' compensation claims by devising an alleged "scheme" to keep the money within the insurance group.
Judge Janet C. Hall granted her final approval last week. In June, Judge Hall gave her preliminary approval of the settlement.
All the members of the class action suit will receive payments averaging $2,200 each, according to David S. Golub of Silver Golub & Teitell, one of four law firms representing the plaintiffs. The firms will share 30 percent of the gross recovery in fees, according to the settlement.
“We are confident that every claimant received the amount that was specified in the structured settlement agreements and are settling to avoid the uncertainties and costs of continued litigation,” Pamela Rekow, spokeswoman for The Hartford, said in an e-mail.
Payments should go out to class members in about 30 to 45 days, said Mr. Golub.
The suit alleged The Hartford paid personal injury and workers’ compensation claims with a structured settlement -- an amount paid over time. The Hartford allegedly developed a “fraudulent scheme” in which the insurer’s property and casualty companies purchased annuities from its life insurance subsidiary, which allegedly kept 15 percent of the value of the settlement for The Hartford. This allegedly shortchanged claimants.
The case was scheduled for trial this month.
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.