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American Gen'l settles suits
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December 16, 1998: 9:08 a.m. ET
Insurer resolves class actions over sales practices, sets $246M charge
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NEW YORK (CNNfn) - American General Corp. said Wednesday it will settle several class action lawsuits brought against its insurance companies.
The company also said it will take a non-recurring after-tax fourth-quarter charge of about $246 million, or 94 cents a share, in connection with the proposed settlement.
Houston-based American General (AGC) said the class action lawsuits involved certain industry sales practices of some of the company's life insurance subsidiaries during the 1980s and early 1990s.
"While American General does not agree with the claims made in the lawsuits," the company said, "and has actively defended against them, it has decided, like many of its peers, to settle the lawsuits rather than continue to engage in a time consuming and costly defense."
American General Financial Group, one of the nation's largest diversified financial services organizations, said the proposed settlements won't have a material impact on the company's financial condition or business operations.
"The life insurance industry has faced a continuing challenge from litigation directed at market conduct issues," Robert M. Devlin, chairman, president and chief executive officer, said. "Through this settlement, American General has sought to resolve these issues in the best interests of its key constituencies."
Some of American General's life insurance subsidiaries included in the settlements are All American Life Insurance Co., Franklin Life Insurance Co. and Old Line Life Insurance Co.
American General rose shares 5/8 to 69-1/4 in Tuesday trading.
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American General Corp.
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