Two long term care insurers and a third party administrator have settled a class-action lawsuit in Missouri.
The plaintiffs in the case accused the defendants of selling long term care insurance policies while knowing that the premiums ultimately would be raised.
The defendants — Mutual of Omaha Insurance Company, Omaha, Neb.; American Heritage Life Insurance Company, a division of Allstate Corp., Northbrook, Ill.; and Wakely and Associates Inc., Largo, Fla. — have agreed to resolve the case by providing life insurance policies and other benefits with a value of up to about $15 million.
The defendants have denied any wrongdoing, and they say they would have contested the litigation “vigorously” if the case had not been settled, according to court papers.
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The settlement was approved by a state court judge in Jackson County, Mo.
Eric and Carol Chalgren, the lead plaintiffs in the case, are Missouri residents who filed a suit in 2002 in connection with LTC insurance policies sold in Missouri from 1995 to 2000. The policies were written by American Heritage and administered by Wakely and Associates. Some of the policies were coinsured by Mutual of Omaha.
The Chalgrens alleged in the suit that the defendants had set initial policy premiums low while planning to impose steep rate increases later.
After the Chalgrens sued, other Missouri residents who had bought American Heritage policies joined in a class action.