|  | | 2006 News and Press Releases | | |
SETTLEMENT NEWS:
Conseco Hoping To Settle; Class Action Accuses Insurer Of Misleading Its Customers About Life Insurance Costs
Tom Murphy
Indianapolis Business Journal. May 22, 2006
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EXCERPT: Conseco Inc. appears close to resolving a class-action lawsuit that encompasses 75,000 polices and accuses the company of duping customers about the cost of insurance. The Carmel-based company said in a regulatory filing that it has entered settlement talks in an attempt to avoid the risks and costs of protracted litigation and has set aside an undisclosed amount of money toward resolving the matter.
At issue are so-called Lifetime and Lifestyle universal life insurance policies purchased by customers nationwide in the 1980s and '90s. Plaintiffs including Edwin Jake Garn, a former astronaut, U.S. senator and insurance executive charge Conseco unfairly changed the way it calculated the cost of the insurance in 2003 and 2004, resulting in a sharp increase in monthly charges. Based on [company] commentary, it appears to me that a settlement could be close, said Jukka Lipponen, an analyst who covers Conseco for New York-based Keefe Bruyette & Woods. …The case, filed in U.S. District Court, Central District of California, involves a consolidation of several lawsuits, including one filed in 2004, with Garn as lead plaintiff, in federal court's Southern District of Indiana.
Kennedy said another lawsuit over the policies is pending in Hamilton County court, waiting for the outcome of the bigger class action. A settlement could deliver a dose of good news to a company hit recently by disappointing earnings and the pending departure of another CEO, William Kirsch. Analysts say settlements generally wind up costing less than what a plaintiff originally sought. …Lawyers involved with the class-action case have met a few times this year to discuss the settlement and agreed to keep talking after a May 11 conference, according to U.S. District Court filings. If settlement talks fall through, a trial is set to begin Oct. 24. |
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