The final payments of a $12.5 million settlement of a lawsuit against Mutual of New York (MONY) were delivered to a number of policyholders this week, the plaintiffs’ attorney said Monday.
Montgomery lawyer, Jere Beasley said checks were delivered to residents – mainly business owners – in Montgomery, Barbour, Bullock, Coffee, Dale, Genva and Henry counties. The amount of the checks was not known Tuesday.
MONY spokesman Charles Wasilweski said the settlement affected over 20,000 policies in the state. The rest were not subject to this litigation, he said.
Mr. Beasley said litigation has been on going for less than a year. The settlement was reached two weeks ago, he said.
The lawsuit stemmed from allegations that MONY agents were misrepresenting themselves and getting policyholders to buy new life insurance policies rather than renew their old ones.
Citing confidentiality, Mr. Wasilewski refused to comment on the specifics of the case.
Mr. Beasley said MONY agents promised policyholders that the new policy would produce dividends that eventually would cover the cost of their premiums.
As a result, the premiums would “vanish,” which means that the policyholder would no longer be required to pay the premium.
In reality, Mr. Beasley said, the premiums would still have to be paid for many years to come.
However, the wasn’t discovered until after the policyholders paid into the policies, said Mr. Beasley, who suggested that the MONY agents were motivated by the potential of high commissions to sell the new policies.
“I hope this case makes a lot of people aware that this is going on out there every day,” Mr. Beasley said.