Insurance holding company Genworth Financial has agreed to pay $219 million to settle a class action lawsuit that alleged securities law violations by the company, its CEO and its former chief financial officer in 2013 and 2014 related to its long-term care insurance reserves and other matters.
“The company believes that the plaintiffs’ claims are without merit but is settling the lawsuit to avoid the burden, risk and expense of further litigation,” Genworth said in a statement issued late March 11. The lawsuit, pending in the U.S. District Court for the Eastern District of Virginia, was settled through mediation, according to the company.
The company’s insurance carriers will pay $150 million of the settlement, and Genworth will deposit $69 million, pre-tax, into an escrow account during the first quarter. The company said it also expects to incur $10 million, pre-tax, in additional legal fees and accruals in the first quarter.