View this article online: https://www.insurancejournal.com/news/east/2017/04/03/446636.htm
Connecticut state workers and retirees will not get part of a $94 million stock windfall received by the state in 2001 and then used to help fill a budget gap.
The state Supreme Court on Friday rejected the workers’ appeal that they, not the state, should have received the Anthem Insurance stock that was issued when the company switched from a mutual to a shareholder-owned company.
The court ruled in 2010 that Connecticut had immunity from the workers’ lawsuit, but it allowed the case against Anthem to go forward.
Anthem argued that a provision of its 1997 merger with the Connecticut company that insured state employees was that policies held before the merger kept their original terms. Before 1997, policies in Connecticut considered the group to be the official member, not the individuals.
The high court, in a unanimous ruling, agreed with a judge who found the Anthem policy documents were “ambiguous with respect to the plaintiffs’ entitlement to membership in Anthem Insurance and a share of the demutualization proceeds.”
Anthem said in a written statement that it was pleased with the ruling.
“Anthem has maintained throughout that its demutualization was conducted properly and in a manner that was fair and reasonable to Anthem’s members,” the company said. “Both the Connecticut Supreme Court and the trial court have now agreed with Anthem’s position.”
The attorney representing the state employees, who had been granted class-action status in the case, did not immediately return a phone call Friday seeking comment.
The state received 1.6 million shares of Anthem stock in 2001 and sold it for $93,768,950, according to the decision. The money went into the 2002-03 state general fund to help erase a budget deficit.
If the workers and retirees had won against Anthem, the value of their stock payouts would have ranged from a few hundred dollars to up to $15,000, depending on factors such as how much they paid in insurance premiums.