BELLEVILLE – Policyholders of the Country Mutual Insurance Company have filed a lawsuit against the company, claiming the insurer is in breach of contract as a mutual insurance company by not providing insurance at cost and returning surplus premiums to policyholders.
Plaintiffs Angela M. Sudholt, Kyhl A. Sudholt, Kara Jones, and Benjamin Jones file a class action lawsuit in the St. Clair County Circuit Court against the Country Mutual Insurance Company, its officers and its directors, citing breach of contract.
According to the lawsuit, as a mutual insurance company, Country Mutual has an obligation to act solely for the benefit of its policyholders. The lawsuit argues that since a mutual insurance company is owned by the policyholders rather than stockholders, the objective of a mutual insurance company is to provide insurance to its policyholders at cost and that excess in premiums paid over the actual cost of providing insurance, as determined by the costs of premiums paid versus liabilities, should be returned to the policyholders.
Country Mutual allegedly owns three stock insurance companies: Country Preferred, Country Casualty, and Cotton Life. The lawsuit states that a mutual insurance company cannot operate for the exclusive benefit of its policyholders if those policyholder's benefits do not fully account for the profits earned from those stock insurance companies.
The lawsuit also states that Country Mutual uses premiums paid by Country Mutual policyholders to support financial incentives of these subsidiary companies. According to the lawsuit, by using surplus funds to serve its own means rather than providing insurance at cost and returning surplus premiums paid over the actual cost of providing insurance to policyholders, Country Mutual is not acting as a mutual insurance company and is in breach of contract in violation of Illinois law.
The plaintiffs request a jury trial to seek damages for themselves and everyone in the proposed class in an amount to be proven at the trial, plus interest, attorney fees and any other relief the court deems proper. They are represented in this case by attorneys David Cates and Katie E. St. John of The Cates Law Firm, LLC, Lyn A. Toops and Amina A. Thomas of Cohen & Malad, LLP and J. Gerard Stranch of Bransetter, Stranch & Jennings, PLLC.
St. Clair County Circuit Court case number 22LA0970