A U.S. insurance company has agreed to pay US$219 million to end a class action lawsuit for allegedly making false and misleading statements about a group that includes the Alberta Investment Management Corp.
The agreement in principle from Genworth Financial requires approval from a U.S. district court in Virginia, where the insurance company has its head office.
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Edmonton-based AIMCo – which invests on behalf of 26 pension, endowment and government funds in Alberta – was one of the lead plaintiffs in the suit, along with the California-based Fresno County Employees’ Retirement Association.
The plaintiffs argued that Genworth’s executives and financial statements had failed to properly disclose information before the company announced in November 2014 that it would need to shore up its long-term care insurance business.
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The announcement of the $531-million accounting charge was followed by a substantial drop in the value of Genworth stock held by AIMCo and other investors.
The Virginia-based insurance company continues to say the claims against it are without merit but has agreed to make the payment to avoid the cost and risk of continuing the battle in court.