Illinois-based Horace Mann has submitted a settlement deal to the court regarding a class action suit, which was levied against the company from customers who purchased a variety of disability policies.
The parties involved in the suit have come to agreement on the settlement, which will be covered through an after-tax reserve of nearly $5 million which was previously made public in the fourth quarter of 2000. The reserve will take care of payment to the class, legal fees and administration costs. The settlement is now awaiting court approval.
According to feedback from plaintiffs in the suit, they indicated they did not entirely understand the provision of the policy’s offsetting benefits due to receipt of others means of income. Policies with offset provisions have premium rates and benefits which are based on the fact that many people have other forms of income to protect against disability, which includes retirement benefits, social security and added insurance policies.
Horace Mann president and CEO Louis Lower II noted that the company was troubled to hear that some of its customers did not fully understand the nature of the product they were purchasing, and, as part of the settlement, have agreed to offer compensation to those policyholders.
Topics Lawsuits
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