Nationwide’s $6million dollar settlement – a snapshot of profit when there’s not “a dimes worth of difference” in the price of drywall

A hat tip to the reader who sent a link to the news of the Nationwide settlement – and must be reading the title of this post wondering what I’ve got under my hat!

Checks are headed to the mailboxes of 230,000 current and former Nationwide term-life insurance customers across the country, settling a class-action lawsuit against the Columbus-based company…Nationwide agreed to pay a $6 million settlement in connection with a suit filed in Franklin County Common Pleas Court in 2005, which alleged that the company collected more than the maximum annual premiums outlined in their policies, according to court documents…Nationwide had been accused in the lawsuit of fraud and violating Ohio consumer-protection laws.

The suit charged that customers who paid semi-annually, quarterly or monthly were charged more than the maximum premium. Those who paid once a year were not charged additional fees…The average check will be for $47, said Marc Stanley, an attorney with the settlement administrator.

Obviously, the case had nothing to do with the cost of drywall or the alleged manipulation of price lists used to adjust claims following Hurricane Katrina.  However, it provides a perspective for looking at the mantra of insures’ defense of pricing differences – “there’s not a dime’s worth of difference”.  A small amount due one policyholder adds up to big dollars when the amount due all similarly situated policyholders is totaled.

So, now do u c it?

Nowdy

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