Northwestern Mutual Life Insurance Co. has agreed to pay $84 million to settle a long-running class action lawsuit over changes the company made to annuities it sold before 1985. About 4,000 current and 29,000 former annuity owners will be eligible to share in the settlement of this case. The proposed settlement must still obtain final approval from U.S. District Judge Lynn Adelman.
The plaintiff class alleged that Northwestern Mutual improperly changed the way it paid people who purchased annuities from the company resulting in their loss of dividend income over 20 years. The original contracts, the class claimed, called for annuity holders to share in a surplus generated by Northwestern Mutual’s general portfolio – something that did extremely well in recent years, including a record $5.5 billion in dividends for 2014.
TBS attorney, Kim D. Stephens, with co-lead counsel George P. Kersten of Kersten & McKinnon, S.C. and David Boies of Boies, Schiller & Flexner LLP, represented a putative Washington class of Northwestern Mutual annuity purchasers in the action.