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A federal court in Illinois has taken a step toward approving a deal that could apply to the owners of 530,000 interest-sensitive life insurance policies who were affected by a life insurance company system conversion effort.
Judge Colin Stirling Bruce — a judge in the U.S. District Court for the Central District of Illinois — recently issued an order granting preliminary approval to a class action settlement for the case Clapp et al v. Accordia Life and Annuity Company et al.
The plaintiffs in the case owned policies that were issued or assumed by Accordia Life and Annuity Company and administered by an outside company. The outside administrator moved the policies from a number of old administration systems to a new system.
The plaintiffs in the Accordia case allege that Accordia and other defendants stopped automatically withdrawing, accepting or applying premium payments during a conversion period, and that, in some cases, this caused policies to lapse, or for other problems to occur, according to a memorandum filed by the plaintiffs.
Accordia has not opposed the proposed settlement agreement, according to the order providing preliminary approval for the agreement.
The Class
The Accordia case in Illinois combines a class action lawsuit filed in the U.S. District Court for the Central District of California in October 2016 with a separate lawsuit filed in the Illinois court in April 2017.
The Illinois court has now provided preliminary certification for a class that includes holders of most Accordia policies issued from May 1, 2014, through June 7, 2019, and of Accordia policies that were converted to a new administration system on or after Aug. 1, 2015. The class also includes the executor or representative of any deceased class member's estate.
The Preliminary Settlement
Policyholders or estate representatives who dislike the settlement can object or opt out.
Class members can also file claims for extra cash compensation within the settlement framework.
