Litigation Insurance Company, which is one of the largest legal insurance companies in the world, said in a press release Tuesday that it has agreed to pay $8 million to settle a class-action lawsuit filed by investors.
The settlement is an “unprecedented, unprecedented resolution,” the company said.
The class-actions settlement, which was filed in a California court in June 2016, alleged that Litigation’s policies did not adequately protect investors when they invested in Litigation-Insurance Company or other securities.
The complaint, which has been referred to the U.S. Court of Appeals for the Ninth Circuit, alleged the policyholders suffered “fraud, misrepresentation, fraud and intentional misconduct” as a result of the policies.
Litigation said in the press release that the settlement was made after it reviewed the complaints and found “significant factual and legal issues.”
In response to the settlement, the New York-based insurance company said it would “make every effort to mitigate any losses” to its investors.
Litigating’s attorneys said in their statement that the lawsuit “categorically alleges that the Company failed to act in a timely and responsible manner to prevent or correct any material errors in the claims.”
Litigation did not specify when the company first learned of the allegations, but said that in early June it had contacted investors who were victims of the alleged violations and notified them of the lawsuit.
“As we have previously stated, our Board and senior management have a clear and consistent policy that requires the highest level of diligence to be applied when evaluating claims of misconduct in our coverage and policies,” the statement said.
“The actions of those who may have committed misconduct in relation to Litigation policies, have contributed to our continued poor record of providing a level of protection to investors.”