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Member, Beacon International Group, Ltd.
PHILADELPHIA--CIGNA Corp. said it has reached a $93 million settlement in connection with a 2002 class action lawsuit filed by shareholders.
CIGNA will take a nonrecurring, aftertax charge in this year's fourth quarter of about $25 million in connection with the agreement, the health insurer said. CIGNA said the charge is net of expected insurance recoveries. A CIGNA spokesman said no further details on insurance coverage are available at this time.
According to the 2005 annual report filed by CIGNA with the Securities and Exchange Commission, the lawsuit was filed on behalf of individuals who bought CIGNA securities from May 2, 2001, to Oct. 24, 2002.
Among other things, CIGNA and several of its officers were charged with misleading CIGNA shareholders about the company's performance during that period.
CIGNA general counsel Carol Ann Petren said in a statement, "CIGNA agreed to reach this settlement in order to avoid the time and expense involved in proceeding to trial. It is important to note that, under the terms of the settlement, CIGNA does not admit to any wrongdoing by the company or its officers."
The settlement must still be approved by the federal district court in Philadelphia. Final approval is expected in April, said CIGNA.
The company said the charge will not affect its consolidated adjusted income from operations, which it has estimated will be between $995 million and $1.04 billion.