Kemper Corp. and subsidiary Infinity Insurance Co. have entered a settlement valued around $17.6 million to end litigation over claims stemming from two data breaches that gave hackers access to customers' personal information, a proposed customer class said Thursday.
Lauraann Wood writes in Law360 Insurance Authority that "the settlement will provide 18 months of financial fraud coverage services and potentially thousands of dollars in reimbursements for more than 6.1 million customers who learned their personal information had potentially been compromised after Kemper and Infinity suffered data breaches in December and March.
"The customers value the settlement around $17.6 million, which they told Judge Pacold 'is an outstanding result.' The deal should receive her early blessing because it 'proposes the gold-standard in class member relief' and resulted from arms-length negotiations, they argued.
"The customers launched various lawsuits against the Kemper and Infinity after learning the insurers were targeted by hackers, first in December and again in March. More than 5.8 million customers were affected in the December breach, and more than 324,000 were affected in the March breach, according to the motion. The insurers offered the customers a year of free credit monitoring when they notified them of the incident, the motion said.
"Once the settlement takes effect, each of the insurers' affected customers will be able to enroll in 18 months of financial fraud coverage through Aura's Financial Shield services, according to the customers' motion. Fraud protection is 'much more useful' than credit monitoring because it focuses on protecting financial assets and is integrated with a service that provides real-time account monitoring, they told the court.
"Settling class members will also be able to submit claims to get reimbursed for any money or time they lost while dealing with effects of the breaches, the motion said. Class members are eligible for up to six hours of lost-time reimbursements at $18 per hour, but they'll receive $50 per hour if they missed work to address the breaches, the motion said.
"A California subclass of Kemper and Infinity customers will also be able to file a claim for $50 in statutory relief, according to the motion. Kemper and Infinity will cap their lost-time reimbursement and California claim payments at $4 million, the motion said.
"Class counsel also intends to ask the court for $2.5 million in attorney fees, representing less than 15% of the settlement's value, the customers told Judge Pacold. The attorneys representing Kemper and Infinity's customers 'achieved an excellent result for the class after undertaking substantial risk in bringing this action on a pure contingency basis, and they should be fairly compensated,' the motion argued."