Insurer to Pay $72.5M to Settle Alleged Structured Settlement Fraud in Earlier Cases
A federal judge in Connecticut has given a preliminary thumbs-up to an insurer’s agreement to pay $72.5 million to settle a class action over the structured settlements it provided to plaintiffs in earlier workers’ compensation and accident cases.
A spokesman for the Hartford still says the company did nothing wrong and settled simply as a business judgment to avoid the expense and uncertainty of litigation, reports the Insurance Capital blog of the Hartford Courant.
However, the plaintiffs alleged that the Hartford didn’t disclose to them in the earlier cases that it would be taking 15 percent in fees, taxes and profit from the amount paid to fund the annuity that typically provides the income stream promised in the structured settlement. The structured settlements were purchased from a different division of the property and casualty insurer.
Each of the 21,000 or so plaintiffs can now expect about $3,300, less attorney’s fees and costs, says partner Carl Kravtiz of Zuckerman Spaeder, which litigated the case against the Hartford.
“The settlement will put real money in the pockets of class members,” he said.
