A St. Clair County judge has approved a $22 million settlement in a class action suit against Jackson National Life Insurance over fixed annuity policies.
Lawyers representing the class, including John Hopkins of Edwardsville, will share $6 million in attorneys' fees. T. Evan Shaeffer of Schaeffer & Lamere in Godfrey also represented the class.
Policy holder George Farmer sued Jackson in 2002 over its methods used to set interest-setting rates for new premiums and for those premiums previously paid to fixed annuities. He and James Granger, who was later added as a named plaintiff, also claimed that Jackson failed to advise its fixed annuity purchasers that Jackson would be crediting higher interest rates to new premiums than it did to previously-paid premiums.
Farmer will receive $10,000 and Granger will receive $2,000 as incentive awards for their participation as class representatives.
St. Clair County Circuit Judge Robert LeChien in 2006 certified a class of policy holders who purchased a Jackson fixed annuity in Illinois and in which Jackson subsequently offered and paid higher interest rates to new purchasers of similar products.
According to the settlement agreement, which was signed by LeChien May 6, Jackson denies all wrongdoing alleged in the litigation and disputes that certification of the class was proper.
"Jackson disputes Plaintiffs' allegations, and contends that the annuity policies did not require Jackson to credit fixed annuities the same interest rate to previously-paid premiums as it does to new premiums," the agreement states.
"Jackson further contends that the policies expressly permit Jackson to increase interest-crediting rates in its discretion subject only to the requirement that those rates at least equal the minimum rates set forth in those policies, and that the interest rates it has credited were always consistent with the policies' terms."
The settlement class includes Illinois policy holders between July 1, 1989 and Oct. 31, 2008, except employers and unions that maintained the annuities through employee benefit plans.
Class members have 30 days from May 6 to make a claim. The specific amount that a class member may recover is based on the interest the class member received while the owner of a fixed annuity.
Any portion of the settlement amount not claimed by class members will revert to Jackson.