CNO Financial's subsidiary, Conseco Life Insurance has reached a tentative settlement in the Nicholas putative class action litigation.
The case comprises of changes that were implemented to some non-guaranteed elements in certain universal life policies sold by Conseco Life in late 2011 prior to its acquisition by CNO’s predecessor.
Conseco Life’s requests for the designation of a nationwide class for approving the tentative settlement and an injunction to stay any other litigation involving the cost of insurance increase implemented by Conseco Life in November 2011 on the Valulife and Valuterm policies that are at issue in the Nicholas litigation were taken under advisement.
The designation of a class for purposes of settlement, if approved would then involve settlement’s final approval being subjected to a court fairness hearing after notice to the inforce and former policyholders covered by the settlement and other conditions.
For the quarter ended 31 March 2012, CNO’s other business segment expects to record a pre-tax charge of $20m, while the tentative settlement is expected to reduce CNO’s consolidated risk-based capital ratio by approximately six percentage points.
CNO, a holding company owns insurance subsidiaries, includes Bankers Life and Casualty, Washington National Insurance and Colonial Penn Life Insurance.