$72.5 Million Class-Action Settlement Approved

A class action lawsuit was filed against Hartford Financial Services, Inc. in 2005, which alleged that the insurance company shortchanged approximately 22,000 injured claimants through structured settlements. In structured settlements, payments are made to the injury victim over time instead of one lump sum. Hartford paid most of its settlements using this method.
Hartford in practice would purchase annuities from its own life insurance company without telling the injury victim. As a result Hartford allegedly retained around 15% of the value of the settlement. These actions dated as far back as 1997. The plaintiffs' attorneys argued Hartford was engaged in racketeering in violation of the federal Racketeer Influenced and Corrupt Organizations Act.
The goal as one attorney stated, "was to put real money in the pockets of class members." A settlement in the amount of 72.5 million dollars was approved on September 21, 2010. However, Hartford has not admitted to any wrongdoing. A spokeswoman said Hartford was settling to avoid the uncertainties and costs of continued litigation. The plaintiffs should receive on average about $3,300.00 from the settlement.