Most Accepting Settlement

All but a tiny fraction of those entitled to participate in the $65 million settlement of a class action lawsuit against New York Life Insurance Co. and New York Insurance and Annuity Corp. have chosen not to do so, a spokesman for the companies said last week.

Policy and annuity holders must decide by the end of this month if they want to accept the terms or pursue a claim on their own.

Spokesman David Pomerantz said those who have not responded to company letters sent in late August will automatically be included in the settlement.

According to Washington Insurance Commissioner Deborah Senn, 90,000 state resident stand to recover as much as $8 million from the insurer.

New York Life was sued because of allegations agents misrepresented “vanishing premium” life insurance, improperly sold life insurance as an investment, or generated additional commissions by replacing current policies with new ones, a practice called “churning.”

In Washington, the major problem was vanishing premium policies, which were supposed to pay off whole life policies in a relatively brief time by using investment proceeds to supplement premiums.

“Many New York Life customers discovered to their dismay that their premiums weren’t disappearing at all,” Senn said.

Those who participate in the settlement will get low-cost loans or other financial assistance to reduce the premiums they face to pay their policies in full.

For more information, call 1-800-356-7790 or 1-800-569-6900.

, DataTimes