Economy
Phoenix will pay 74 million shekels to policyholders in settlement agreement on unpaid interest
The court approved the settlement agreement in a class action lawsuit, whereby insurance companies refrain as a matter of policy from adding interest on insurance payments in all branches of insurance, in all types and in all policies, contrary to law
· Source: TheMarker. Photo as published in the article
The District Court in Tel Aviv approved a settlement agreement whereby Phoenix insurance company will pay 74 million shekels to its policyholders. According to reports, the settlement concerns unpaid interest differentials on insurance payments paid late.
The District Court in Tel Aviv approved a settlement agreement whereby Phoenix insurance company will pay 74 million shekels to its policyholders. According to reports, the settlement concerns the failure to pay interest differentials on insurance payments made by the company late.
The lawsuit was filed against insurance companies Phoenix, Migdal, Harel, Menora Meubarim and Clal Insurance. According to the plaintiffs, insurance companies refrain, as a matter of policy, from adding interest on insurance payments made by them in all branches of insurance, in all types of insurance and in all insurance policies without exception, contrary to Section 28(a) of the Insurance Contract Law.
This concerns delays in payments beyond 30 days, the last date by which insurance companies are required to pay compensation. According to the plaintiffs, interest amounts accrued from the end of 30 days from the date the claim was submitted until the date of actual payment belong to the policyholders, but for years insurance companies pocketed these funds, which accumulated to enormous sums.
As part of the agreement, the issue of payment of interest in the future by the companies was also settled on issues at the basis of the proceedings, and it was recommended that the companies pay the plaintiffs attorneys' fees of 15.5 million shekels before VAT. Phoenix noted that the company made provisions for the amount in its books, so the ruling does not change its financial results.
