Coventry Settles N.Y. Case

By Trevor Thomas

October 01, 2009 at 08:00 PM

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Coventry First L.L.C. says it has settled a civil lawsuit that was filed in October 2006 by the New York state attorney general.

The attorney general had charged that Coventry, Fort Washington, Pa., had underpaid some policy owners in the state when it bought their policies through the life settlement market.

Under the agreement with the current New York Attorney General Andrew Cuomo, Coventry will pay an additional $1,447,285 to the policyholders. Coventry also has agreed to pay $10,552,715 to New York state to end the litigation.

Coventry was not assessed any fine or penalty under the settlement.

The agreement requires Coventry to disclose to New York policy owners the amount of compensation paid to intermediaries in life settlements.

The agreement follows a ruling in July by a state court that Cuomo could pursue the case against Coventry in court rather than being forced to go to arbitration.

In announcing its agreement with Cuomo, Coventry said it has paid more than $2.8 billion to consumers for their insurance policies. Over the past 12 months, Coventry said, it has paid policy owners 5 times more than they would have received had they surrendered their policies back to the insurance companies that sold them the policies.

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