Zurich Financial Services says it will pay up to $455 million (SFr438 million) to settle a class action suit over management fees in the United States.This content was published on October 7, 2010 - 09:36
The insurance company, based in Switzerland’s largest city, said the money would go to a total of up to 13 million policy holders, plus another $90 million in attorneys’ fees.
In a statement on Thursday, the company said that while the allocation plan for payments to class members had not yet been determined, and while actual individual payments might vary considerably, this averages to an estimated $35 per class member or policyholder subscriber.
It added that the settlement and related costs would be fully funded internally, and would neither impact the strength of the Zurich balance sheet, nor its dividend policy.
The proposed settlement would resolve all claims dating back to 1999 in a complaint originally filed in August 2003.
In the lawsuit, there was a challenge against management services fees paid by Farmers Exchanges to Zurich’s subsidiary Farmers Group and some of its affiliates.
The Farmers Group manages the third largest personal lines insurance company in the United States. Along with its subsidiaries, it is wholly owned by the Zurich Financial Services Group.
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