Indianapolis-based WellPoint Inc. has agreed to pay $90 million to settle a class-action lawsuit brought on behalf of more than 700,000 former members of Anthem Insurance Cos. Inc., lawyers for the plaintiffs said Friday afternoon.
The suit was set to go to trial on June 18 in federal court in Indianapolis on claims arising from Anthem’s 2001 conversion from a mutual company, owned by its insured policyholders, to a public company.
WellPoint is the corporate parent of Anthem.
The settlement, if approved by U.S. District Court Judge Tanya Walton Pratt, will resolve the lawsuit filed in 2005 by Anthem members who received cash compensation as part of the conversion process to a public company. The conversion resulted in Anthem’s shelling out nearly $2.1 billion in cash to more than 700,000 policyholders.
The complaint alleged that Anthem did not pay the former mutual company members the fair value of their interests.
Other policyholders elected to receive stock in the conversion, and they have sued WellPoint in a separate lawsuit.
If the $90 million settlement is approved, checks should be mailed to class members later this summer. Each class member would receive about $128.57, not counting attorneys’ fees.
Anthem was prepared to “vigorously defend itself at trial but is pleased to have reached a settlement," the company said in a prepared statement.
“We continue to believe that in all ways the company acted appropriately and in the best interests of its former members,” WellPoint said. “Today’s settlement enables us to put this matter behind us and focus our time and energy on meeting the needs of our customers.”
The company said the Indiana Department of Insurance reviewed the transaction and found it to be fair, reasonable and equitable to Anthem's former members.