Phoenix Insurance to Pay 74 Million Shekels in Class-Action Settlement
Phoenix Insurance will pay 74 million shekels in a class-action settlement approved by the Tel Aviv District Court for unlawfully withholding statutory interest on delayed payouts.
Phoenix Insurance has agreed to pay 74 million shekels in a massive settlement approved by the Tel Aviv District Court after deliberately withholding statutory interest payments from policyholders.
The legal storm stems from a class-action lawsuit targeting major industry giants including Phoenix, Harel, Menora Mivtachim, Migdal, and Clal. According to a report published Sunday in The Marker, the companies systematically avoided adding statutory interest to payouts delayed by more than 30 days from the claim submission date, keeping the funds for years instead of transferring them to clients as mandated by the Insurance Contract Law.
The landmark settlement not only compensates past victims but permanently alters future practices by regulating the mandatory interest payment mechanism. Meanwhile, the plaintiffs' legal counsel is set to receive 15.5 million shekels in legal fees before VAT.
Despite the substantial payout, Phoenix quickly reassured investors that the financial maneuver will not impact the company's results, as the required funds were already provisioned in its financial books ahead of time.
