A federal judge approved on Friday a $214 million settlement of the class-action lawsuit claiming American General Life and Accident Insurance Co. overcharged black and low-income policyholders for burial insurance. U.S. District Court Judge John Nixon also approved a prosecutors’ request for $24.1 million in fees and another $500,000 for the defense.
American General agreed in June to the settlement, which covers an estimated 9.1 million policyholders nationwide. Many of the policies were sold by acquired companies, and American General claimed to be unaware of the discriminatory actions of those companies.
Under the settlement, customers will be compensated at least $150 for each policy and may receive additional benefits, including premium reductions. Similar suits are pending against other companies, including Prudential Insurance Co. of America and MetLife. Also, American General has agreed to a $1.2 million regulatory settlement with Florida’s insurance department. Departments of insurance in 33 other states will split another $5.8 million.
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