Genworth settles lawsuit alleging LTC insurance misreporting for $219 million
Insurance provider Genworth will pay $219 million to settle a class-action lawsuit alleging that it misrepresented the profitability of its long-term care insurance unit, the company announced last Friday.
The lawsuit, In re Genworth Financial, Inc. Securities Litigation, accused the insurance giant, along with chief executive Tom McInerney and former chief financial officer Marty Klein, of making misleading statements about the company's long-term care insurance business profits and financial standing. Genworth assured shareholders that the company had “adequate long-term care reserves,” but cited outdated information in reporting its profitability.
The misrepresentation, which occurred between October 2013 and November 2014, led to a “dramatic” drop of 55% in the company's shares and damage for shareholders, according to Investment News.
“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 news release.
Final approval of the settlement is expected to occur sometime in late summer or early fall.