IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF OKLAHOMA

Transcription

1 IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF OKLAHOMA LONA F. BUCK, Individually and on Behalf of All Others Similarly Situated, v. Plaintiff, AMERICAN HERITAGE LIFE NSURANCE COMPANY, INC. A/K/A ALLSTATE WORKPLACE DIVISION, a Foreign Corporation, and THE ALLSTATE CORPORATION, a Foreign Corporation Defendants. C.A. NO. 5:08-CV-1295-W STIPULATION OF SETTLEMENT AND RELEASE I. RECITALS A. Lona Buck ( Buck or Plaintiff ) is the Plaintiff in the above-captioned matter, which was filed as a putative nationwide class action on behalf of certain past and current owners of Cancer and Dread Disease policies issued by American Heritage Life Insurance Company ( AHL or Defendant ). B. Plaintiff alleges in her Complaint, among other things, that AHL failed to properly administer and adjudicate claims submitted under the chemotherapy / radiation benefit provision in such policies and interpret such provision, and thus breached its contracts with its insureds. C. AHL denies the allegations in the Complaint, specifically denying the material allegations of liability and wrongdoing. AHL further denies any liability for any claims, causes of action, costs, expenses, attorneys fees, or damages related to 1

2 the allegations in the Complaint. AHL contends, among other things, that it has properly administered, adjudicated, and paid claims submitted by insureds under the chemotherapy / radiation benefit provision in such policies and properly interpreted such provision. D. AHL is an indirect subsidiary of The Allstate Corporation ( Allstate ). Plaintiff alleges in her Complaint, among other things, that AHL adjudicated claims pursuant to Allstate s policies and procedures. E. Allstate denies the allegations in the Complaint and any liability for any claims, causes of action, costs, expenses, attorneys fees, or damages related to the allegations in the Complaint. Allstate contends, among other things, that it did not issue or insure the policies or adjudicate claims (or dictate the policies and procedures) under any of the policies at issue in the lawsuit. F. Plaintiff has engaged in substantial discovery to evaluate the merits of the claims and of the defenses of AHL and Allstate, and also to determine whether Plaintiff s claims are appropriate for class treatment. Plaintiff has, through discovery and other means, investigated to her satisfaction various facts and allegations of the Complaint, as well as having sufficiently analyzed the legal issues surrounding the claims, defenses, and class certification. G. Plaintiff and Class Counsel have concluded, in light of the costs, risks, and delay of litigation, and in light of the benefits obtained in this Settlement Agreement, that it would be in the best interests of the Plaintiff and the putative Class to enter into this Settlement Agreement to ensure a benefit to the putative 2

3 Class. Plaintiff and Class Counsel have determined that this settlement is fair, reasonable, adequate, in the best interests of the Plaintiff and the members of the putative Class, and is superior to other available methods for the fair and efficient resolution of this vigorously contested controversy. H. Defendants expressly deny any wrongdoing alleged in the Complaint and pleadings and do not admit or concede any actual or potential fault, wrongdoing or liability in connection with any facts or claims that have been or could have been alleged against them in the lawsuit, or that Plaintiff or any Class Members have suffered damage or were harmed by the conduct alleged. Nonetheless, in light of the nature of the costs, risks, delays, and uncertainties inherent in litigation, Defendants have concluded that this proposed settlement is appropriate and in Defendants best interests, enables AHL to avoid further expense and disruption of the management and operation of its business due to the pendency of the lawsuit, avoids the substantial expense, burdens and uncertainties associated with continued litigation, and maintains and preserves goodwill of Defendants. I. The Parties understand the Court must approve the proposed settlement set forth in this Settlement Agreement and, upon Court approval, the Parties intend to seek a Final Order and Judgment from the Court dismissing with prejudice all of Plaintiff s claims and the claims that members of the putative Class made or could have made in this lawsuit, and that are covered by the Release contained in this Settlement Agreement. The Parties agree that this Settlement Agreement is final and enforceable only upon Court approval. 3

4 J. Therefore, the Parties agree that in consideration of the agreements, promises, and mutual covenants set forth in this Settlement Agreement, including without limitation the Release, the entry by the Court of a Final Order and Judgment dismissing the lawsuit with prejudice and approving the terms and conditions of the settlement as set forth in this Settlement Agreement, and for such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, that this lawsuit shall be settled and compromised under the following terms and conditions: II. DEFINITIONS The following terms have the following meanings, unless a section or subsection of this Settlement Agreement or its exhibits, provides otherwise: A. Action shall mean the lawsuit captioned Lona Buck v. American Heritage Life Insurance Company, et. al., No. 5:08-CV-1295-W, pending in the United States District Court for the Western District of Oklahoma. B. Administrator or Settlement Administrator shall mean, the entity designated by AHL, in consultation with and approved by Class Counsel and approved by the Court, to help implement the terms of this Settlement Agreement. C. Agent shall mean any of AHL s current or former agents, general agents, sales representatives, sales agents, solicitors, producers, brokers, representatives, group policyholders, employees, independent contractors, or any other person or entity who engages in, or has engaged in, the solicitation, sale, marketing, distribution and/or administration of the Cancer Policies. 4

5 D. AHL or Defendant shall mean American Heritage Life Insurance Company, its predecessors, successors, assigns, parent companies, subsidiaries, divisions, reinsurers, related or affiliated entities, administrators, and past or present officers, directors, attorneys, Agents, and employees. E. Allstate shall mean The Allstate Corporation, its predecessors, successors, assigns, subsidiaries, divisions, reinsurers, related or affiliated entities, administrators, and past or present officers, directors, attorneys, agents, and employees. F. Attorneys Fees and Expenses shall mean such amount, not to exceed $1,542,500.00, the maximum amount AHL agrees to pay and Class Counsel agrees to accept, which may be awarded to Class Counsel to compensate them (and any other attorneys for Plaintiff or Class Counsel) for their attorneys fees, costs, and expenses in connection with this Action. G. Cancer Policy or Cancer Policies shall mean, whether collectively or individually, all Cancer and Dread Disease policies issued by AHL with a policy form pre-fix of CP4, CP5, CP6, CP7, CP8, CP9, CP10, or CP11 (regardless of whether any letter or number sequence follows such pre-fix), and in force at any time during the Class Period, and includes the following sub-categories: (1) Capped Cancer Policies, meaning those CP7, CP10 and CP11 policies that contain a maximum benefit cap under the Chemotherapy Benefit Provision; (2) Uncapped Cancer Policies, meaning CP4, CP5, CP6, CP8 and CP9 policies that do not contain a maximum benefit cap under the Chemotherapy Benefit Provision; and (3) Uncapped CP10 Cancer Policies, meaning CP10 policies that 5

6 include a Cancer and Specified Disease Enhancement Rider also known as a CCR Rider, which pays for either 50% or 100% of usual and customary charges otherwise payable under the Chemotherapy Benefit Provision of the Cancer Policy. H. Chemotherapy Benefit Provision shall mean the provision of the Cancer Policies that pays benefits for charges for certain treatment techniques for radiation or radiation therapy, radio-active isotopes therapy, chemotherapy, or immunotherapy provided they are used for the purpose of modification or destruction of cancerous tissue. I. Claim shall mean a request for Class Benefits that is submitted by a Class Member to the Settlement Administrator in accordance with the terms herein. J. Claim Forms shall mean the document(s) that each Claimant is required to submit to request Class Benefits. The Claim Forms are attached as Exhibit 4 to the Settlement Agreement. K. Claim Form Deadline shall mean the deadline for Claim Forms to be received by the Settlement Administrator, which shall be 60 days after the Claim Form is placed in the mail by the Settlement Administrator. L. Claimant shall mean a Class Member, or the legal or duly authorized representative of a Class Member, who timely and properly submits a Claim to the Settlement Administrator. M. Claims Period shall mean the time period within which a Claim Form must be submitted to and received by the Settlement Administrator. 6

7 N. Claims Process shall mean the process and procedure for the submission, evaluation, and resolution of Claims in accordance with the terms herein. O. Class or Class Member shall mean all Insureds and Covered Persons (1) who were insured under a Cancer Policy at any time between October 24, 2003 and ending on the last date Class Notice Packages are placed in the mail, and who submitted a claim and received benefits under the Chemotherapy Benefit Provision of such Cancer Policy, and/or (2) who are insured under a Cancer Policy on the date Class Notice Packages are last placed in the mail. Excluded from the Class are: (1) any person who has already released or obtained a judgment against any of the Defendants on the claims raised in the Action, or against whom Defendants, or any one of them, obtained a judgment on the claims raised in the Action; (2) any person who, as of the date of signing of the Preliminary Approval Order, has a pending lawsuit against any of the Defendants arising out of or relating to the interpretation of or payment of benefits under the Chemotherapy Benefit Provision of a Cancer Policy and is not represented by Class Counsel (but only as to the individual plaintiff, not as to any putative class that has not been certified by final unappealable order); (3) any person whose coverage under a Cancer Policy has been rescinded by AHL or judicially rescinded by a court of law; and (4) any person who timely excludes himself/herself from the Class in accordance with the terms herein. P. Class Benefits or Class Relief shall mean those benefits (monetary or otherwise) to be given to Class Members who submit timely and valid Claims, and benefits to be paid in the future, as described more fully in this Settlement 7

8 Agreement. To be entitled to receive Class Benefits, a Class Member must fully comply with each of the requirements set forth in this Settlement Agreement. Q. Class Counsel shall mean: Tony Gould George H. Brown Brown & Gould, PLLC 136 NW 10 th Street Oklahoma City, Oklahoma who has agreed to accept appointment as Class Counsel for the Settlement Class and shall act on behalf of the Plaintiff and all Class Members. R. Class Notice Package(s) shall mean the notice package(s), as approved in form and content by Class Counsel, Defense Counsel, and the Court, and attached hereto as Exhibit 1, to be mailed to Class Members as set forth in this Settlement Agreement. S. Class Period shall mean the period beginning on October 24, 2003 (being five 5 years prior to the filing of the Action) and ending on the last date the Class Notice Packages are placed in the mail by the Settlement Administrator. T. Class Representative shall mean Plaintiff Lona Buck. U. Court shall mean the United States District Court for the Western District of Oklahoma. V. Covered Person shall mean a person other than the Insured who is insured under a Cancer Policy. W. Defendants shall mean AHL and Allstate, as those terms are defined herein, whether jointly or individually. X. Defendants Counsel or Defense Counsel shall mean: 8

9 Andrew G. Jubinsky Timothy A. Daniels Figari & Davenport, LLP 901 Main Street Suite 3400 Dallas, Texas Y. Fairness Hearing shall mean the final hearing at which the Court will consider and make a final decision whether to certify the Class, approve this Settlement Agreement as fair, reasonable, and adequate, award Attorneys Fees and Expenses, enter the Final Judgment, and make such other final rulings as are contemplated by the Settlement Agreement. Z. Final Judgment shall mean a Court Order giving final approval to the settlement and this Settlement Agreement, and a judgment entered pursuant to that Order, a copy of which is attached hereto as Exhibit 2. AA. Final Settlement Date shall mean when the last of the following dates with respect to the Final Judgment shall have occurred: (i) the expiration of seven (7) business days after the time to file a motion to alter or amend the Final Judgment under Fed. R. Civ. P. 59(e) has passed without any such motion having been filed; (ii) the expiration of seven (7) business days after the time in which to appeal (or extension of the time in which to appeal) the Final Judgment has passed without any appeal having been taken; or (iii) if such motion to alter or amend is filed or if an appeal is taken, including petitions for rehearing, reconsideration or petitions for certiorari, restricted appeals or any other form of review, seven (7) business days after the conclusive determination and final disposition thereof in a manner that affirms the Final Judgment in all respects. If the seventh (7th) business day falls on a weekend or a Court holiday, the date for purposes of the Settlement 9

10 Agreement shall be deemed to be the next business day after such seventh (7th) day. BB. Insured shall mean the primary named insured under, and whose name appears on the Policy Schedule of, a Cancer Policy. In the event a Cancer Policy includes Covered Persons, the Insured shall act on behalf of all persons insured under a Cancer Policy, i.e. the Covered Person(s), and such actions shall be binding on all such Covered Persons. CC. Opt-Out Date shall mean the final day by which a Class Member s request to be excluded from the Class must be received by the Settlement Administrator. The Opt-Out Date shall be twenty-five (25) days before the date of the Fairness Hearing. DD. Parties or Party shall mean the Plaintiff (in her individual and representative capacities) and/or Defendants, and where applicable, their respective counsel. EE. Preliminary Approval Order shall mean the Order entered by the Court concerning notice, administration, and setting the date for the Fairness Hearing, a copy of which is attached hereto as Exhibit 3. FF. Release shall mean the comprehensive release and dismissal set forth in this Settlement Agreement. GG. Released Claims shall mean all claims and causes of action asserted or assertable in this Action, or in any state or federal court, in or before any regulatory body, arbitration, administrative agency, or in any other proceeding, arising out of or relating to any claim against the Released Parties: (a) that the 10

11 Chemotherapy Benefit Provision of any of the Cancer Policies should provide coverage or benefits for non-cancercidal drugs or for drugs, medicines, chemical substances, instruments, supplies or services that do not themselves directly modify or destroy cancerous tissue, even if such non-cancercidal drugs, drugs, medicines, chemical substances, instruments, supplies or services are involved in, supportive or protective of, or used in conjunction with such charges that directly modify or destroy cancerous tissue; (b) involving the interpretation or alleged ambiguity of the Chemotherapy Benefit Provision of the Cancer Policies; (c) involving the claims handling, administration, adjudication and/or payment of benefits under the Chemotherapy Benefit Provision of the Cancer Policies as it pertains to AHL s interpretation that (i) each individualized charge within the specified treatment techniques must be used for the purpose of modification or destruction of cancerous tissue or (ii) non-cancercidal drugs, drugs, medicines, chemical substances, instruments, supplies or services that do not themselves directly modify or destroy cancerous tissue (even if they are involved in, supportive or protective of, or used in conjunction with charges that directly modify or destroy cancerous tissue) are not covered benefits under the Chemotherapy Benefit Provision of the Cancer Polices; (d) involving the procedures or guidelines used by AHL to determine which charges for the specified treatment techniques are payable; (e) that charges for white blood cell boosters, anti-nausea medications, pain medications, protein infusions, drugs that protect the patient s heart from damage, drugs that reduce the level of renal injury, chemo-protective drugs, chemo-supportive drugs, or pegfilgrastin, 11

12 filgrastin, dexrazoxane, amifostine, mesna, granisetron (or any generic, brand, or future generic or brand names thereof, including without limitation and by way of example, Neulasta, Neupogen, Zinecard, Ethyol, Mesnex, or Kytril), or granulocyte colony stimulating factors should be covered or payable under the Chemotherapy Benefit Provision of the Cancer Policies, including, but not limited to, any tort claims, contract claims, bad faith claims, extra-contractual claims, statutory claims, controversies, claims for disgorgement, claims for restitution, actions, causes of action, declaratory judgment actions, cross-claims, counter claims, demands, debts, claims for damages, liquidated damages, unliquidated damages, restitution, consequential damages, compensatory damages, punitive damages or exemplary damages, equitable relief, injunctive relief, costs, interest, expenses and/or attorney fees, or liabilities, or claims of any nature in both law or in equity, past and present, and whether known or unknown, suspected or claimed, including the Unknown Claims, regardless of whether the Plaintiff or each potential Class Member timely makes a claim for Class Benefits under this Settlement Agreement. HH. Released Parties shall mean Defendants and each of their past, present, and former employees, officers, directors, shareholders, Agents, administrators, predecessors, successors, assigns, parent corporations, related corporate entities (specifically including any Allstate entity), affiliated companies, insurers, reinsurers, and attorneys, and the agents and employees of them. II. Released Transactions shall mean any and all direct or indirect acts, omissions, representations, statements, occurrences, suggestions, or 12

13 communications that are related to or connected in any way with: (1) the design, development, marketing, sale, suitability, administration, cost, servicing, training, supervision, modification, underwriting, lapse, termination, performance, payments, premiums, premium increases, notice procedures, pricing, cost of insurance rates and charges, claims handling, benefits, coverage, commissions, taxes, contract interpretation of, and other matters involving or relating to the Chemotherapy Benefit Provision of the Cancer Policies, including, without limitation, the matters described in the Release; and (2) the impact that the receipt of any Class Benefits or Class Relief under the Settlement Agreement may have on the terms, performance, obligations, and value of the Cancer Policies. JJ. Releasor shall mean: (1) Plaintiff; (2) any Class Member who does not timely exclude himself/herself from the Class pursuant to this Settlement Agreement; (3) any Claimant or anyone representing that Class Member or acting on his/her behalf or for his/her benefit; and (4) any Class Member s agents, attorneys, predecessors, successors, insurers, administrators, heirs, executors, and assigns. KK. Settlement Agreement shall mean this document and the exhibits attached hereto or incorporated herein, including any subsequent written amendments and any exhibits to such amendments. LL. Settlement Notice Plan shall mean the comprehensive notice plan describing the manner and form of notice to notify the Class of the proposed settlement. The Settlement Notice Plan is set forth in Section VII of this Settlement Agreement 13

14 and must be approved in form and content by Class Counsel, Defense Counsel, and the Court. III. DENIAL OF WRONGDOING OR LIABILITY This Settlement Agreement constitutes the resolution of the Action and is for settlement purposes only. Defendants expressly deny that they violated any law, improperly interpreted or administered the Chemotherapy Benefit Provision of the Cancer Policies, breached any agreement or obligation to the Plaintiff, the Class, or to any putative Class Member, and also deny that they have engaged in any wrongdoing with respect to the Plaintiff, the Class, or any putative Class member. Defendants deny that they are liable for any claims, causes of action, costs, expenses, attorneys fees, damages, or compensation of any kind. In particular, AHL contends that it has properly interpreted and administered the Chemotherapy Benefit Provision of the Cancer Policies and adjudicated claims thereunder in accordance with the terms thereof, and Allstate contends that it did not dictate the policies or procedures used by AHL to interpret or administer the Cancer Policies or adjudicate claims thereunder. Neither this Settlement Agreement nor any actions undertaken by Defendants in satisfaction of this Settlement Agreement shall constitute, or be construed as, an admission of any liability or wrongdoing, or recognition of the validity of any allegation of fact or law made by the Plaintiff, the Class, or any putative Class Member in this Action or in any other action or proceeding. This Settlement Agreement, any statements or negotiations made in connection with this Settlement Agreement, and any actions undertaken pursuant to this Settlement Agreement, shall not be admissible as evidence or in any other fashion against Defendants in any action, lawsuit, or proceeding for any purposes, except: (1) in any action, lawsuit, or proceeding brought to enforce the terms of this Settlement Agreement by or against the Plaintiff, the Class, any Class Member, or Defendants; 14

15 or (2) by Defendants in defense of any claims brought by the Plaintiff, the Class, or a Class Member or Class Members. IV. CLASS CERTIFICATION FOR SETTLEMENT PURPOSES ONLY Upon execution of this Settlement Agreement, the Parties agree that, subject to Court approval and for settlement purposes only, the settlement of this Action upon the proposed terms satisfies the requirements for class certification under the applicable rules of civil procedure. Defendants agree to nationwide certification of the Class for settlement purposes only. Any class certification order entered in this Action, under this Settlement Agreement or otherwise, shall not constitute, in this or in any other action or proceeding, an admission by Defendants, a finding, or evidence that the Plaintiff s claims, or those of any other putative Class Member, are appropriate for class treatment, or that any of the requirements for class certification are otherwise satisfied. If this Settlement Agreement does not become effective because (1) the Court does not give full and final approval of the settlement and of this Settlement Agreement, (2) the Settlement Agreement is determined to be null and void, or (3) the Court s approval of this Settlement Agreement is reversed on appeal, then the Court s Order certifying the class for settlement purposes shall be null and void, vacated, of no force and effect, and shall no longer be in effect. Additionally, by entering into this Settlement Agreement, Defendants in no way waive their rights to challenge or contest Plaintiff s allegations that a class should be certified in this Action. V. SETTLEMENT CLASS RELIEF A. Past Claims. Class Members who received benefits under the Chemotherapy Benefit Provision of an Uncapped Cancer Policy between October 24, 2003 and 15

16 the entry of the Preliminary Approval Order will receive an additional first occurrence benefit of $1,200.00, provided the Class Member timely submits a fully completed Claim Form. Class Members who received benefits under the Chemotherapy Benefit Provision of an Uncapped CP10 Cancer Policy between October 24, 2003 and the entry of the Preliminary Approval Order will receive an additional first occurrence benefit of (1) $ if the CCR Rider pays for 100% of usual and customary charges and (2) $ if the CCR Rider pays for 50% of usual and customary charges, provided the Class Member timely submits a fully completed Claim Form. Class Members who received benefits under the Chemotherapy Benefit Provision of a Capped Cancer Policy between October 24, 2003 and the entry of the Preliminary Approval Order will receive an additional first occurrence benefit of $50.00, provided the Class Member timely submits a fully completed Claim Form. Only one first occurrence benefit payment shall be made per Class Member regardless of the number of claims for benefits made by a Class Member under a Cancer Policy. B. Future Claims First Occurrence Benefit. AHL shall continue to process claims under the Chemotherapy Benefit Provision of the Cancer Policies pursuant to its existing practices and procedures, namely that each charge within the specified treatment technique under the Chemotherapy Benefit Provision must be for the purpose of modification or destruction of cancerous tissue in order to be eligible for reimbursement (subject to other Cancer Policy provisions). However, for claims submitted under the Cancer Policies after the entry of the Preliminary Approval Order, and if benefits are payable under the Chemotherapy Benefits 16

17 Provision, then (1) a Class Member insured under an Uncapped Cancer Policy will receive a first occurrence benefit of $1, in addition to the benefits payable under the Chemotherapy Benefit Provision, (2) a Class Member insured under an Uncapped CP10 Cancer policy will receive, in addition to the benefits payable under the Chemotherapy Benefit Provision, a first occurrence benefit of (a) $ if the CCR Rider pays for 100% of usual and customary charges and (b) $ if the CCR Rider pays for 50% of usual and customary charges, and (3) a Class Member insured under a Capped Cancer Policy will receive a first occurrence benefit of $50.00 in addition to the benefits payable under the Chemotherapy Benefit Provision, provided such Class Members did not receive any monetary relief under Section V.A. above. Only one first occurrence benefit payment shall be made per Class Member regardless of the number of claims for benefits made by a Class Member under a Cancer Policy. If a Class Member received a first occurrence benefit for a past claim under Section V.A. above, they are not eligible to receive another first occurrence benefit under this Section, and vice verse. C. Current Uncapped Policyholders. The Insureds (but not any Covered Persons) of an Uncapped Cancer Policy in force as of the date of the Preliminary Approval Order shall also have the following options: (1) to surrender their Cancer Policy for the total sum of $6,000.00, thereby voluntarily cancelling and terminating the Cancer Policy in all respects and foregoing the right of the Insured and any Covered Persons thereunder to seek any rights, benefits or payments under the Cancer Policy, or monetary relief under Section V.B. above, in the 17

18 future (however any claims incurred for dates of service prior to the surrender of the Cancer Policy shall be paid subject to and according to the Cancer Policy terms); or (2) upon completion of a short form life insurance application, AHL will guarantee issue a term life insurance policy to the Insured in the face amount of $10,000.00, and no premiums will be owing for such life insurance policy for the lesser of three years or as long as the Insured is insured under the Cancer Policy. If, after three years, the Insured is still insured under the Cancer Policy, the Insured may keep the life policy in force with timely payment of required premiums. D. Current Uncapped CP10 Policyholders. The Insureds (but not any Covered Persons) of an Uncapped CP10 Cancer Policy in force as of the date of the Preliminary Approval Order shall also have the following options: (1) to surrender their Cancer Policy for the total sum of $2, if the CCR Rider pays for 100% of usual and customary charges or $1, if the CCR Rider pays for 50% of usual and customary charges, thereby voluntarily canceling or terminating the Cancer Policy in all respects and foregoing the right of the Insured and any Covered Persons thereunder to seek any rights, benefits or payments under the Cancer Policy, or monetary relief under Section V.B. above, in the future (however, any claims incurred for dates of service prior to the surrender of the Cancer Policy shall be paid subject to and according to the Cancer Policy terms); or (2) upon completion of a short form life insurance application, AHL will guaranty issue a term life insurance policy to the Insured in the face amount of $4, if the CCR Rider pays for 100% of usual and customary charges and 18

19 $2, if the CCR Rider pays for 50% of usual and customary charges, and no premiums will be owing for such life policy for the lesser of three years or as long as the Insured is insured under the Cancer Policy. If, after three years, the Insured is still insured under the Cancer Policy, the Insured may keep the life policy in force with timely payment of required premiums. E. Eligibility of Deceased Class Members. If a Class Member dies after the entry of the Preliminary Approval Order, but before the date when Class Relief would otherwise be awarded to him or her, the Class Member s estate shall be eligible to nominate itself or another person to receive, in the Class Member s stead, any Class Relief to which the Class Member selected or otherwise would be entitled to under this Settlement Agreement. In the event the deceased Class Member is the Insured, then with respect to the relief set out in Section V.C. and D above, upon written request by the estate of the Insured, the estate of the Insured will receive the applicable life policy proceeds as if the Insured had chosen the life insurance policy benefit. F. Claims Practices. Class Members understand and agree that AHL will continue to administer and adjudicate claims under the Chemotherapy Benefit Provision as it has in the past. Specifically, under the Chemotherapy Benefit Provision, AHL will only pay for individual charges within the specified treatment techniques that are directly used to destroy or modify cancerous tissue. AHL will not pay for any charges (whether currently existing or developed in the future) that are supportive or protective of, or used in conjunction with, charges that are directly used for the purpose of destruction or modification of cancerous tissue, and will not pay for 19

20 charges otherwise excluded from coverage under the Chemotherapy Benefit Provision. G. Funding of Administrative and Notice Costs. As more specifically provided for herein, AHL will pay for the cost of administering the settlement, including paying to provide notice to Class Members regarding the settlement. H. Notwithstanding any other provision of this Settlement Agreement, where more than one person is insured or has an ownership interest in the Cancer Policy, the Insured shall be presumed to be acting jointly in exercising any right under this Settlement Agreement. If the Insured excludes himself or herself from the Class with respect to a Cancer Policy, all Claimants having a current or prior ownership in that Cancer Policy, including Covered Persons, shall be deemed to be excluded with respect to that Cancer Policy. If the Insured exercises any option to surrender his or her Cancer Policy under Section V.C. or V.D. above, coverage shall also cancel and terminate for any Covered Persons thereunder. I. The Plaintiff, Class Counsel, and Defendants further agree that under no circumstances shall Defendants be responsible for paying any monies, benefits, costs, expenses, or attorneys fees in settlement of this Action other than as expressly provided for by this Settlement Agreement. Further, Defendants shall not be required, or obligated, to take any action or incur any liability or pay any expense or be required to do any other thing, except as expressly provided for in this Settlement Agreement. 20

21 VI. RETENTION OF THE SETTLEMENT ADMINISTRATOR A. Defendants may appoint, at Defendants expense, a Settlement Administrator to assist in implementing the terms of the proposed settlement. B. The Settlement Administrator shall perform various administrative tasks, including, without limitation: (1) arranging the mailing of the Class Notice Package to all Insured Class Members; (2) otherwise making the Class Notice Package available and accessible to Class Members; (3) handling returned mail not delivered to Class Members; (4) making any additional mailings required by this Settlement Agreement; (5) answering written inquiries about the Claims Process from Class Members and Claimants; (6) receiving and maintaining on behalf of the Court correspondence from Claimants regarding requests for exclusion from the settlement; (7) handling Claim Forms submitted by Class Members and Claimants; (8) determining the timeliness and validity of submitted Claim Forms; (9) timely submitting to Class Counsel and Defense Counsel lists of Class Members entitled to Settlement Benefits; (10) taking other steps mutually agreed upon by the Parties to promote accurate and efficient communication with Class Members, Claimants, and others; and (11) otherwise assisting Class Counsel, Defendants, and Defense Counsel with the administration of this Settlement Agreement. Class Counsel and/or its designee shall be entitled to monitor the performance of the Settlement Administrator, but not increase the expenses of the Settlement Administrator unless approved by Defendants. C. The Settlement Administrator shall also establish and maintain an independent settlement website containing content agreed to by the Parties. The website 21

22 address will be or an agreeable alternative. The content of the website shall include, but not be limited to, a description of the settlement and a sidebar link to the live pleadings, Settlement Agreement, notices, and Claim Form. D. If the Settlement Administrator fails to adequately perform its duties, Defendants may remove and replace the Settlement Administrator, subject to Court approval. E. Right of Communication. Defendants expressly reserve the right to communicate with and to respond to inquiries from Insureds, Class Members, or Claimants orally and/or in writing, and they may do so directly through any appropriate Agent or agencies. Mass and/or generalized communications with Class Members specifically about the Settlement Agreement, whether by Class Counsel or Defendants, and whether by mail, the establishment or encouragement of Internet websites or other Internet communications, telephone scripts, or any other means, shall be made jointly, or individually with the approval of the other Party. VII. NOTICE TO THE CLASS AND COMMUNICATIONS WITH CLASS MEMBERS AND INSUREDS A. Identification of Potential Class Members. Within sixty (60) days after the Court enters the Preliminary Approval Order, AHL shall create, at its own expense, and only to the extent such information is reasonably available in AHL s electronic database, a list of Cancer Policies issued to Class Members who are Insureds, including such person s last known address. AHL shall provide the 22

23 Settlement Administrator with an electronic copy of the list and the Settlement Administrator shall use reasonable efforts to obtain current addresses, when practicable, for persons who are not current Insureds. B. The Settlement Administrator shall provide notice as follows: Subject to the Court s Preliminary Approval Order and no later than sixty (60) days before the Fairness Hearing, the Settlement Administrator shall send the Class Notice Package via first class mail, with address correction requested, at AHL s expense, to all Class Members who are Insureds at the address the Settlement Administrator believes to be the most current address for such Class Member. The Notice shall be in substantially the form attached hereto as Exhibit 1. The Court must approve the Class Notice Package before distribution and mailing. Notice to the Insured under a Cancer Policy shall be deemed notice to any Covered Persons under the same Cancer Policy. C. Class Notice Package. The Settlement Administrator shall send a Class Notice Package to each Class Member who requests such package from the Settlement Administrator as a result of receiving notice of the settlement within ten (10) business days after receiving the request. Furthermore, the Settlement Administrator shall establish a variety of methods through which a Class Notice Package can be obtained, including by downloading or printing the Class Notice Package from the Settlement website and by mail request. AHL shall pay for the costs associated with producing and mailing the Class Notice Package and with making the package available by the means specified herein. 23

24 D. Class Notice. The agreed upon Class Notice Package is attached hereto as Exhibit 1. The Class Notice shall be in the manner and form agreed upon by the Parties and approved by the Court. E. R ing and Additional Notice. The Settlement Administrator shall: (i) r once any notices and Class Notice Packages that are returned as undeliverable by the U.S. Postal Service and contain forwarding addresses; (ii) submit any returned notices and Class Notice Packages without a forwarding address to the National Change of Address database maintained by the U.S. Postal Service, provided that returned notices or Class Notice Packages that do not include a forwarding address are received by the Settlement Administrator no later than thirty-five (35) days before the Fairness Hearing; and (iii) r a notice or Class Notice Package once to any Class Member for whom an updated address is discovered by the Settlement Administrator within seven (7) business days of receiving the updated address. F. Within ten (10) business days after the Final Settlement Date, the Settlement Administrator will mail Claim Forms to those Class Members who (1) are eligible for relief under Section V.A. or (2) are entitled to make an election under Section V.C or D. VIII. CLAIM PROCESS A. To be entitled to Class Benefits for past claims, a Claimant must submit a Claim Form, signed under penalty of perjury, to the Settlement Administrator, fully completed by or for the Claimant, according to the instructions contained therein. The Claim Form must be postmarked on or before the Claim Form Deadline. A 24

25 Claimant is not entitled to Class Benefits under Sections V.A. or V.C. if he/she submits a Claim Form that is postmarked after the Claim Form Deadline or received by the Settlement Administrator more than five (5) days after the Claim Form Deadline. B. As to each Claim Form it receives, the Settlement Administrator shall have discretionary authority to determine whether the Claim Form is timely and complete and all necessary information is provided. C. The Settlement Administrator acting in good faith shall have discretionary authority to review the Claim Form to determine whether a Claimant is entitled to a Class Benefit and the amount of such Class Benefit. D. All actions and decisions of the Settlement Administrator regarding a potential Class Member s eligibility to receive the Class Relief shall be final and not subject to review or appeal. Class Members, their successors and assigns, Claimants, Class Counsel, Defendants, or any other party-in-interest may not appeal, seek review, or otherwise challenge such determinations in any subsequent court or administrative proceeding; provided, however, Defendants or any Class Member or Claimant who disagrees with the Settlement Administrator s determination whether relief is due to a Class Member or Claimant may, within twenty-one (21) days of receiving notice from the Settlement Administrator of its decision, provide the Settlement Administrator with evidence and proof that demonstrates that the Class Member or Claimant is or is not entitled to relief. The Settlement Administrator shall review and decide whether to modify or uphold its decision within thirty (30) days of receiving such 25

26 additional proof, at which time the Settlement Administrator s decision shall be final and binding. E. AHL may request the Settlement Administrator to mail Class Benefits to Class Members or Claimants who are entitled to relief at the address on the Claim Form, or AHL may elect to mail such Class Benefits itself. F. The Settlement Administrator shall keep complete records of all of its contacts with Claimants, including copies of all documentation received. G. Class Counsel and Defense Counsel are entitled to periodically review the Claims Process to ensure compliance with the Settlement Agreement. The Settlement Administrator shall grant full access to all data, communications, and reports created and maintained during the administration of this Settlement Agreement to Class Counsel and Defense Counsel. Class Counsel agrees not to disclose any proprietary information or trade secrets of Defendants or the Settlement Administrator that Class Counsel may learn or does learn in the review process, or to use said information or secrets for any purpose whatsoever other than to fulfill their duties as Class Counsel and to ensure compliance with the Settlement Agreement. IX. REQUESTS FOR EXCLUSION A. Any potential Class Member who is an Insured who wishes to be excluded from the Class and settlement must mail a written request for exclusion to the Settlement Administrator at the address provided in the Class Notice. The request for exclusion must specify the policy number of the Cancer Policy that the potential Class Member wants to exclude. The request must be received by the 26

27 Settlement Administrator by the Opt-Out Date. If such Insured s Cancer Policy also insures Covered Persons, then the Insured s timely request for exclusion shall apply to and bind such Covered Persons too. The Settlement Administrator s decision as to whether a request for exclusion was received by the Opt-Out Date is final and binding. A list reflecting all requests for exclusion shall be assembled by the Settlement Administrator for filing with the Court at or before the Fairness Hearing. B. Any potential Class Member who is not excluded by the filing of a timely written request for exclusion with respect to a Cancer Policy shall be bound by all subsequent proceedings, orders, and judgments in this Action, even if he or she has pending, or subsequently initiates, litigation, arbitration proceedings, or any other legal, administrative, or regulatory proceeding against any of the Defendants relating to the Cancer Policies and the claims released in this Action. X. OBJECTIONS TO SETTLEMENT A. Any Class Member who has not submitted a timely written request for exclusion and who wishes to object to the fairness, reasonableness, or adequacy of this Settlement Agreement or the proposed settlement, or to the award of Attorneys Fees and Expenses, must deliver to the Court s Clerk, Class Counsel, and Defense Counsel a written objection that references this Action and must include: (i) the objector s name, address and telephone number; (ii) the policy number of the Cancer Policy that makes the objector a member of the Class; (iii) the name of this case and the case number; and (iv) a statement of each objection detailing the specific reasons, if any, for each objection, including the legal and factual support 27

28 the objector wishes to bring to the Court s attention and any evidence the objector wishes to introduce in support of the objection(s). If the objection is presented through an attorney, the written objection must also include: (i) the identity and number of Class Members represented by objector s counsel; (ii) the number of such represented Class Members who have opted out of the settlement; (iii) the number of such represented Class Members who have remained in the settlement and have not objected; and (iv) the date the objector s counsel assumed representation for the objector. Such written objections must be received by the Court s Clerk, Class Counsel, and Defense Counsel twenty-five (25) days before the date of the Fairness Hearing, or as the Court otherwise directs, or the Class Member shall be forever barred from objecting to the Class or in any way collaterally attacking the Class, this settlement, the Settlement Agreement, the Release, and/or any Final Judgment entered in the Action. B. Any Class Member may object either on his/her own or through an attorney hired at his/her own expense. If a Class Member hires an attorney to represent him or her, the attorney must timely: (1) file a notice of appearance with the Court s Clerk; and (2) deliver to Class Counsel and Defense Counsel, at the address provided in the Class Notice, a copy of the same. The notice of appearance must be received by the Court s Clerk, Class Counsel and Defense Counsel twenty (20) days before the date of the Fairness Hearing, or the attorney will not be allowed to appear at the Fairness Hearing. C. Any Class Member who files and serves a written objection meeting the requirements set forth herein, may appear at the Fairness Hearing, either in person 28

29 or through counsel retained at the Class Member s expense, to object to the fairness, reasonableness, or adequacy of this Settlement Agreement, the proposed settlement, or the award of Attorneys Fees and Expenses. Class Members or their attorneys intending to make an appearance at the Fairness Hearing must deliver to Class Counsel and Defense Counsel and file with the Court, at the addresses provided in the Class Notice, a notice of intention to appear. Such notice of intention to appear must be received by the Court, Class Counsel, and Defense Counsel twenty (20) days before the date of the Fairness Hearing or as the Court otherwise directs. D. The Court shall not hear or entertain objections that fail to comply with the requirements set forth herein. Any Class Member who fails to comply with the orders of the Court or provisions of this Section shall waive and forfeit any and all rights he or she may have to appear separately and/or object, and shall be bound by all the terms of this Settlement Agreement and by all proceedings, orders, and judgments in this Action, including the Final Judgment. E. The Court, within its discretion, may exercise its right to deem any objection as frivolous and award appropriate costs and fees to Class Counsel and/or Defense Counsel. F. Plaintiff agrees that she shall not request exclusion from the Class, object to the proposed settlement, or file an appeal from, or otherwise seek review of, any Court order approving the Settlement Agreement or Final Judgment. G. If objectors to this Settlement Agreement elect to appeal from the Final Judgment, Class Counsel agrees to cooperate fully in the defense of the Final Judgment. 29

30 XI. RELEASE A. The Plaintiff and all Class Members promise and agree that they shall, on and after the Final Settlement Date and by operation of the Final Judgment, fully release and forever discharge the Released Parties from liability for the Released Claims and Released Transactions. The Release in this Section is a general release of the Released Claims and Released Transactions as described herein to the Released Parties, individually and collectively, and the parties intend and agree that it shall be broadly interpreted, construed, and enforced as such, and shall encompass Unknown Claims. The Plaintiff also releases and forever discharges the Released Parties from liability for all individual claims asserted or assertable in the Action. B. In consideration of the Class Benefits described above, the Plaintiff and all Class Members shall be deemed to have agreed to the Final Judgment and dismissal with prejudice of the Action. C. Unknown Claims means all claims arising out of facts relating in any way to any matter covered by the Released Claims or Released Transactions that all persons or entities providing releases, including all Class Members, do not know or suspect to exist in their favor and that, if known by them, might have affected their decision to settle. All persons or entities providing releases under the Settlement Agreement may hereafter discover facts other than or different from those that such persons now know or believe to be true with respect to the Action or matters covered by the Released Claims or Released Transactions. The Plaintiff and Class Counsel explicitly took this into account in entering into the 30

31 Settlement Agreement. On and after the Final Settlement Date, each person or entity providing releases under this Settlement Agreement, including but not limited to all Class Members who are or were residents of the State of California during the time period identified above in the definition of Class, expressly waive and release, and shall be deemed to have waived and released, any and all rights that he, she, it, or they may have under any statute, regulation, administrative adjudication, or common law principle that would otherwise limit the effect of the foregoing releases to those claims actually known or suspected to exist at the time of execution of the Settlement Agreement, including, but not limited to, the provisions of Section 1542 of the California Civil Code, to the extent deemed applicable, which provides as follows: General Release-Claims Extinguished. A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. D. Nothing in this Release shall preclude any action by any Party or Released Party to enforce the terms of this Settlement Agreement. E. On and after the Final Settlement Date, for the consideration provided for herein and by operation of the Final Judgment, Plaintiff and all Class Members and the Class shall be deemed to have promised and agreed that they shall not, at any time, institute, cause to be instituted, assist in instituting, or permit to be instituted on their behalf any proceeding in any state or federal court, in or before any regulatory body or administrative agency, or any other proceeding, or otherwise allege or assert any of the Released Claims or Released Transactions against any of the Released Parties. 31