BELLEVILLE, Ill. (CN) – Jackson National Life will pay $22 million to settle a class action suit over fixed annuity policies. George Farmer sued in 2002 over the methods Jackson used to set interest rates for new premiums and for premiums previously paid to fixed annuities.
Farmer and Jason Granger, who was added as a named plaintiff, said Jackson failed to advise fixed-annuity purchasers that Jackson would be crediting higher interest rates to new premiums than it did to previously paid premiums.
St. Clair County Circuit Judge Robert LeChien approved the settlement.
Lawyers will share $6 million in attorney’s fees. Farmer will receive $10,000 and Granger $2,000 for serving as class representatives.
Jackson denies wrongdoing as part of the settlement and argues that the class certification was not proper.
The class consists of all Illinois policyholders between July 1, 1989 and Oct. 31, 2008. Class members have 30 days from May 6 to make a claim; the amount recovered will be based on the interest the class member received as owner of the fixed annuity. Jackson will keep any unclaimed portion of the settlement.