NU Online News Service, July 1, 2004, 7:02 p.m. EDT
Massachusetts Mutual Life Insurance Company, Springfield, Mass., says it has agreed to a settlement that could resolve years of litigation over disputes about its sales practices.[@@]
A judge in the U.S. District Court in Newark, N.J., has given the agreement preliminary approval and scheduled a fairness hearing for Nov. 22.
The settlement would end a group of cases consolidated under the caption Varacallo et al. vs. Massachusetts Mutual Life Insurance Company et al. under the jurisdiction of the U.S. District Court in Newark, N.J. The cases concern complaints about permanent life policies and some term life and disability income policies issued by MassMutual affiliates from Jan. 1, 1983, to Dec. 31, 2003.
The affiliates are Connecticut Mutual Life Insurance Company, C.M. Life Insurance Company, Massachusetts Mutual Life Insurance Company and MML Bay State Life Insurance Company.
The cases involve different kinds of charges. The Varacallo case, for example, involves allegations that MassMutual misrepresented the likely performance of interest-sensitive permanent life insurance policies.
“MassMutual has denied and continues to deny all the allegations in the action and believes that the allegations have no basis in law or fact,” MassMutual says in a statement about the settlement. “Further, MassMutual believes that it has complied with all existing laws that relate to its sale, administration and servicing of policies. MassMutual has settled the litigation to avoid the uncertainty, expense and burden of protracted litigation.”
Massachusetts would provide a settlement death benefit for some class members and claim review relief for others, MassMutual says.
MassMutual reports it also will provide additional written disclosures and make changes in policy administration procedures.
The settlement of the Varacallo litigation “will not have a material impact on the consolidated financial position of the company,” the company says.