Niewinski v. State Farm $65M Settlement (June Payments Update)

_IMPORTANT PAYMENTS UPDATE: Payments to Class Members were expected to begin on June 12, 2024, with a delivery time of 10-15 days._

State Farm has agreed to pay $65,000,000 to settle a class action lawsuit for alleged improper Cost of Insurance deductions from the Cash Values of their life insurance policies. This settlement impacts current and former owners of certain State Farm life insurance policies, potentially providing them with a share of the settlement fund.

Who Benefits?

The settlement benefits individuals who own or owned one of the approximately 450,000 policies issued by State Farm, specifically Form 86040/A86040 and 86075/A86075 flexible premium adjustable whole life (or universal life) insurance policies.

How much can I get?

The amount each class member can receive varies but includes a minimum payment of $10. The exact amount is calculated based on the monthly deductions for Cost of Insurance and Expense charges paid by each policyholder.

Important Dates

• Fairness Hearing: March 28, 2024
• Deadline to File a Claim: No claim filing is necessary as settlement checks will be automatically issued.
• Payments to class members: First payments begin on June 12, 2024

Can I Claim an Award?

The Settlement Class includes all persons or entities who own or owned one of the approximately 450,000 Policies issued by State Farm. Policies mean all Form 86040/A86040 flexible premium adjustable whole life (or universal life) insurance policies, as well as all Form 86075/A86075 flexible premium adjustable whole life (or universal life) insurance policies that were issued and administered by State Farm or their predecessors in interest. A Policy includes all applications, schedules, riders, and other forms that were specifically made a part of the Policies at the time of their issue, plus all riders and amendments issued later. Policies include everything that was part of 'The Contract,' as that term is defined in your Policy or Policies.

You are not part of the Settlement Class if you are State Farm; any entity in which State Farm has a controlling interest; any of the officers or members of the board of directors of State Farm; the legal representatives, heirs, successors, and assigns of State Farm; anyone employed with Representative Plaintiffs’ counsel’s law firms; or any Judge to whom this case is assigned or his or her immediate family. If someone who would otherwise be a Settlement Class Member is deceased, his or her estate is a Settlement Class Member.

How Much Can I Get?

• Minimum settlement relief payment: $10.00
• Proportionate share of the Remaining Net Settlement Fund: This is determined from the Monthly Deductions for COI and Expense charges paid on each Policy as identified in Defendant’s 'Policyholder-Master Record.'

If the Court approves the Settlement, settlement checks will be mailed to Settlement Class Members in amounts that will vary according to a Distribution Plan. The Distribution Plan is designed to provide each Settlement Class Member an approximate pro rata portion of the Net Settlement Fund in proportion to the amount of monthly deductions actually paid by each Settlement Class Member for Cost of Insurance and Monthly Expense Charges. There will also be a minimum cash payment and more paid where a Settlement Class Member’s Policy is still in force.

What Policies Are Involved?

The settlement involves the Cost of Insurance that State Farm deducted from the Cash Values of these life insurance policies. The policies in question are:

• Form 86040/A86040 flexible premium adjustable whole life (or universal life) insurance policies
• Form 86075/A86075 flexible premium adjustable whole life (or universal life) insurance policies

Is Proof Required to Claim the Reward?

No proof is required to claim the reward. Settlement checks will be automatically issued to each Settlement Class Member if the Court approves the Settlement and after any appeals are resolved.

How to Claim Your Award

Settlement Class Members do not have to do anything to participate in the Settlement. No claims need to be filed. Upon approval of the Settlement, a settlement check will be sent to every Settlement Class Member in the amount determined by the Settlement Administrator using the method described in the Distribution Plan. If someone who would otherwise be a Settlement Class Member is deceased, his or her estate is a Settlement Class Member. If your address changes, you should contact the Settlement Administrator to give them your new address.

For more information, visit the official settlement website.

$65,000,000 Settlement Fund

State Farm has agreed to pay $65 million to settle the class action lawsuit. This amount will be used to pay all payments to Settlement Class Members, Class Counsel’s attorneys’ fees and expenses, any service awards to Plaintiffs, and the expenses incurred in administering the Settlement.

State Farm has agreed to fund a Settlement Fund in the amount of $65 million, which will be used to pay: (1) all payments to Settlement Class Members; (2) Class Counsel’s attorneys’ fees and expenses in an amount to be approved by the Court; (3) any service awards to Plaintiffs (including the named plaintiffs in the related litigation) in an amount to be approved by the Court; and (4) the expenses incurred in administering the Settlement. The Net Settlement Fund equals $65 million less the amounts described in (2) through (4) as approved by the Court.

Why is There a Class Action Settlement?

The Niewinski v. State Farm lawsuit is about whether State Farm’s Cost of Insurance deductions were improper, including, specifically, whether they were consistent with the policy language in its Form 86040/A86040 and 86075/A86075 flexible premium adjustable whole life (or universal life) insurance policies. The policies have a Cash Value that earns interest at or above a minimum rate guaranteed under the policies. The policies expressly authorize State Farm to take a Monthly Deduction from the Cash Value to cover various charges.

Representative Plaintiffs allege that State Farm took improper deductions from the Cash Values of its policies. State Farm denies all of Representative Plaintiffs’ claims, including claims challenging the pricing of the policies and development and application of the Monthly Cost of Insurance Rates, and asserts that, at all times, it complied with the plain language of the policies by deducting charges from the Cash Value, including but not limited to the Monthly Expense Charge and the Cost of Insurance, that are, and always have been, consistent with the language and terms of the policies.