A federal judge has approved a $214-million settlement of a class-action lawsuit claiming American General Life and Accident Insurance Co. overcharged black and low-income policyholders in dozens of states for burial insurance.
U.S. District Court Judge John Nixon of Nashville on Friday also approved a prosecutors' request for $24.1-million in fees and another $500,000 for the defense.
Nashville-based American General Life and Accident agreed to the settlement in June. The settlement covers some 9.1-million black and white policyholders nationwide.
American General Life and Accident also has agreed to a $1.2-million regulatory settlement with Florida's insurance regulator, which led the investigation of the company.
"This demonstrates the importance of access to the courts for victims of wrongdoing in our country," said Melvyn Weiss of the New York-based law firm Milberg, Weiss, Hynes, Bershad & Lerach.
Many of the policies were sold by companies American General Life and Accident acquired over the years. Customers will be compensated at least $150 for each policy and may receive additional benefits, including premium reductions.
Similar lawsuits are pending against other insurance companies, including Prudential Insurance Co. of America and MetLife.
Regulators in 33 other states will split another$5.8-million. Tennessee is expected to receive $528,600.