Conseco Inc. expects to cough up another $35 million to settle a massive consumer lawsuit about changes to its life insurance policies.
That brings the Carmel-based insurer's total pre-tax expense on the case to $250 million-and there's always a chance the bill could run higher, the company warned today. The settlement is subject to court approval.
Scores of Conseco life insurance policyholders sued the company after it removed a mysterious "R factor" from its mortality calculations, which caused monthly premiums for some policyholders to spike. Conseco made the changes months after it emerged from a complicated bankruptcy reorganization in September 2003.
The "Lifetime" and "Lifestyle" policies involved in the lawsuit were acquired by Conseco in the late-1990s from Massachusetts General Life Insurance Co. and Philadelphia Life Insurance Co.
When Conseco announced a proposed settlement of the suit nearly a year ago, then-CEO James Hohmann said, "Implementation of this settlement will resolve a significant historical issue."