Accordia Insurance Agent Commissions Class Action Lawsuit
Berger Montague served as lead counsel in a class action lawsuit against Accordia Life and Annuity Co. and Alliance-One Services, Inc. involving unpaid and delayed commissions to life insurance agents. The case was filed on November 30, 2018, and settled on October 28, 2020.
The class consisted of 79,000 life insurance agents who sold or serviced insurance policies issued or assumed by Accordia and administered on Alliance-One’s policy servicing platform. The Plaintiff alleged that widespread policy administration errors occurred when more than 500,000 insurance policies were transferred to the Alliance-One servicing platform, which was incompatible with the underlying policies. The errors led to the delay or non-payment of agents’ commissions, caused agents to spend significant amounts of time investigating and responding to policy problems, interfered with agents’ relationships with their policyholder clients, and caused other harms.
Under the settlement, cash payments totaling $3.1 million were automatically distributed to agents, without the need to submit a claim form or supporting documents. Settlement distributions ranged from $5 to $55,400 per agent. Agents received compensation under one or both of two damage models that calculated settlement payments based on the specific types and amounts of harm suffered by each agent.
First, a “Delay Damages” model compensated each agent who experienced at least one commission payment that was delayed by more than sixty days. The model applied a 4% interest rate to each delayed commission payment based on the number of days it was delayed.
Second, an “Other Damages” model compensated all agents who were a Servicing Agent of record for at least one insurance policy during the class period. Compensation under this model was in addition to (not in lieu of) compensation under the Delay Damages model. Awards from the Other Damages model were calculated based on the number of aggregate days the agent was the Servicing Agent for each of his or her collective policies.
The settlement also provided valuable Injunctive Relief. The Defendants were required to:
- Remediate all known remaining issues that continued to prevent commission payments from being properly generated;
- Promptly pay any unpaid commissions that were resolved in connection with the remediation work noted above, plus 4% interest;
- Retain a Third-Party entity to review the Defendants’ commission systems to determine whether all remaining issues have been identified and remediated;
- Review a sampling of future premium and commission payments for two years to ensure that commissions are being correctly calculated;
- Notify Class Counsel if any regulatory settlements are reached that conflict with the injunctive remedies agreed to in the settlement; and
- Enhance the level of detail in certain commission statements sent to agents going forward.
The Class Action Complaint is available here. The Settlement Notice is available here. The Settlement Agreement is available here. The Court’s Final Approval Order is available here.
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