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Accordia Insurance Agent Commissions Class Action Lawsuit

CASE NUMBER: 18-cv-00458
PRACTICE AREAS: Consumer Protection
CASE STATUS: Settled
COURT: U.S. District Court for the Southern District of Iowa

Berger Montague serves as lead counsel in a class action lawsuit brought against Accordia Life and Annuity Co. and Alliance-Once Services, Inc. The case was filed on November 30, 2018. A settlement has been reached, which received final Court approval on October 28, 2020.

The class consists of 79,000 life insurance agents who sold or serviced insurance policies issued or assumed by Accordia and administered on a policy servicing platform run by Alliance-One. The Plaintiff alleged that widespread policy administration errors occurred when more than 500,000 insurance policies were transferred to Alliance-One’s 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 will be automatically distributed to agents, without the need for them to submit a claim form or any supporting documents. Settlement distributions will range from $5 to $55,400 per agent. Agents will receive compensation under one or both of two damage models that calculate settlement payments based on the specific types and amounts of harm suffered by each agent.

First, a “Delay Damages” model will compensate each agent who experienced at least one commission payment that was delayed by more than sixty days. The model applies a 4% interest rate to each delayed commission payment based on the number of days it was delayed.

Second, an “Other Damages” model will compensate all agents who were a Servicing Agent of record for at least one insurance policy during the class period. Compensation under this model is in addition to (not in lieu of) compensation under the Delay Damages model. Awards from the Other Damages model are 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 provides valuable Injunctive Relief. Defendants must:

  1. Remediate all known remaining issues that continue to prevent commission payments from being properly generated;
  2. Promptly pay any as-yet-unpaid commissions that were resolved in connection with the remediation work noted above, plus 4% interest;
  3. Retain a Third-Party entity to review Defendants’ commission systems to determine whether all remaining issues have been identified and remediated;
  4. Review a sampling of future premium and commission payments for two years to ensure that the commissions are being correctly calculated;
  5. Notify Class Counsel if any regulatory settlements are reached that conflict with the injunctive remedies agreed to here; and
  6. 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.

About Berger Montague

Berger Montague is one of the largest class action law firms in the U.S. The firm has more than 60 attorneys and an experienced team of paralegals and support staff. Berger Montague has been a leader in the class action field for over 50 years.

Lead Attorneys

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Michael Dell'Angelo

Managing Shareholder
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Jon J. Lambiras

Shareholder

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