Clal Insurance Settles Class Action Over Uncashed Checks for NIS 29 Million
The Tel Aviv-District Court approved a NIS 29 million class-action settlement against Clal Insurance over uncashed mail checks. The company will transition to digital payments and compensate policyholders.
The Tel Aviv-District Court has approved a settlement in a class-action lawsuit against Clal Insurance, valued at approximately NIS 29 million as of the end of 2024. Judge Oded Maor presided over the case, which centered on uncashed insurance payouts and premium refunds sent via physical checks by mail.
According to the legal action, this practice violated Capital Market Authority directives, which mandate that digital bank transfers or credit card refunds serve as the default method for disbursing funds to policyholders. Mailing checks is legally restricted to situations where payment details are absent or at the explicit request of the client. Consequently, uncashed funds remained unlawfully retained by the insurance company.
The settlement agreement, reached before the company submitted its formal defense, applies to class members from July 1, 2017, until the ruling becomes final. Clal Insurance has committed to complying with legal regulations and executing direct digital payments and refunds as the standard procedure moving forward.
Policyholders owed more than NIS 76 will receive proactive outreach via SMS, email, or mail, including a secure link to update their banking information. Individuals who update their details within 120 days of notification will receive their full compensation, complete with linkage differentials and interest.
Funds left unclaimed after the deadline, alongside amounts below the NIS 67 eligibility threshold, will not remain with the insurer. Instead, 70% of these residual funds will be allocated to the official Fund for Management and Distribution of Class Action Monies.
The court awarded the plaintiff a compensation incentive of 2.28% of the settlement amount plus VAT, while legal counsel was granted 14.22% plus VAT in legal fees, payable in installments as the settlement is implemented. Acknowledging the early resolution and judicial time saved, the court exempted the company from paying the second installment of the court fee and mandated public notices in the press and on its corporate website.
