Aflac Inc. has reached a settlement in its lawsuit charging that Assurant Inc. copied 4 Aflac supplemental insurance policies almost verbatim.
Under terms of the settlement, Assurant, New York, agreed to stop selling cancer and accident policies and two health care indemnity policies with wording that copied much the language of policies issued by Aflac, Columbus, Ga.
Assurant will also pay an undisclosed amount to Aflac that would recoup “a significant part of the cost of the litigation,” says Mechell Clark, an Aflac spokeswoman.
Assurant will soon reintroduce the policies with amended language, a company spokesman says.
“New contract language has been rewritten and the process of refiling has begun for the accident and cancer policies,” says Rob Guilbert, a spokesman for Assurant Health. “As a result of the settlement, we will also begin rewriting certain contract language for our sickness indemnity and hospital indemnity products and begin the refiling process.”
Assurant already has resumed selling revised accident and cancer policies in Texas, he said. It has also filed revised accident and cancer policies in Arkansas, Colorado, Florida, Idaho, Maine, Ohio, Utah and Wisconsin.
The 2 other disputed policies are also undergoing revision, Guilbert added.
“This settlement allows us to expedite the process of offering our customers and agents a full suite of supplemental insurance products as quickly as possible,” Assurant’s Guilbert says.
He emphasizes the settlement covers its contract language only.
“They do not impact any other aspect of our products such as benefits offered, rates or commissions,” he says.
Assurant executives also don’t foresee a significant impact on its business from the settlement, Guilbert adds.
Mote Andrews, associate legal counsel for Aflac, says company executives were “thrilled with the successful outcome of this litigation and consider the settlement agreement to be a complete victory for Aflac.”
In January, the U.S. District Court in Atlanta granted a preliminary injunction enjoining Assurant and subsidiaries Fortis Insurance and John Alden Life Insurance from selling the 4 products, which the court said used language “substantially similar” to the 4 Aflac voluntary worksite policies.
The agreement will in effect make the preliminary injunction against those policies permanent, Clark says.