RICHMOND, Va., March 11, 2016 /PRNewswire/ -- Genworth Financial, Inc. ("Genworth" or the "Company") today announced that it has reached an agreement in principle to settle the previously disclosed action In re Genworth Financial, Inc. Securities Litigation (3:14-cv-00682), currently pending in the United States District Court for the Eastern District of Virginia. Plaintiffs in the lawsuit alleged securities law violations by Genworth, its current chief executive officer and its former chief financial officer, related to certain disclosures in 2013 and 2014 concerning, among other things, Genworth's long term care insurance reserves. The agreement in principle was reached in connection with a voluntary mediation.
The settlement will include a full release of all Defendants in connection with the allegations made in the lawsuit. The Company believes that the Plaintiffs' claims are without merit, but is settling the lawsuit to avoid the burden, risk and expense of further litigation.
The agreement provides for a settlement payment to the class of $219 million (inclusive of all Plaintiffs' attorneys fees and expenses and settlement costs), of which $150 million will be paid by the Company's insurance carriers, and $69 million pre-tax will be paid by the Company. The Company's payment is expected to be made into an escrow account during the first quarter of 2016. In addition, the Company expects to incur additional legal fees and accruals related to the litigation over amounts previously accrued and expensed of approximately $10 million pre-tax in the first quarter of 2016.
The settlement is subject to definitive documentation, notice to the putative class, and court approval, which process will take several months.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance holding company committed to helping families achieve the dream of homeownership and address the financial challenges of aging through its leadership positions in mortgage insurance and long term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com. From time to time, Genworth's publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth Mortgage Insurance Australia Limited, separately release financial and other information about their operations. This information can be found at http://genworth.ca and http://www.genworth.com.au.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding a final settlement agreement, additional legal fees and accruals, and the anticipated financial impact of settling this litigation matter. There can be no assurance that a final settlement agreement will be reached on the terms described above based on the agreement in principle or at all, that the court will approve the settlement, or that the ultimate financial impact will be as currently anticipated. Forward-looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, including the satisfaction of the conditions described herein. Actual outcomes and results may differ materially from those in the forward-looking statements due to global political, economic, business, competitive, market, regulatory and other factors and risks. We therefore caution you against relying on any forward-looking statements. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
SOURCE Genworth Financial, Inc.