Israeli Insurers Agree to Record $250 Million Settlement in Class Action Lawsuit

A Tel Aviv District Court has approved a landmark settlement in a class-action lawsuit against five major Israeli insurance companies, requiring them to pay a combined total of hundreds of millions of shekels. The lawsuit, which spanned over 13 years and involved extensive legal proceedings, alleged that the insurers violated Section 28(a) of the Insurance Contract Law by failing to add interest to insurance payouts made to policyholders more than 30 days after a claim was submitted.

The core dispute centered on when the 30-day period for adding interest should begin: from the initial claim submission or from when the last required document for assessing liability was received. The court recognized the public importance of such class-action suits.

The settlement, pending final court approval and subject to objections, includes unprecedented compensation amounts. Migdal will pay NIS 56.9 million, Phoenix and Clal each NIS 74 million, Harel NIS 78 million, and Ayalon NIS 27.3 million in past compensation. Future adjustments and administrative changes are valued at tens of millions of shekels for each company. Significant attorney fees and compensation for the lead plaintiffs were also awarded, totaling tens of millions of shekels across the companies.

Payments will be managed by an appointed accountant who will coordinate with banks to obtain account details of eligible claimants. The full settlement amount will be deposited into a trust account 45 days after a final judgment. Additionally, 30% of funds contributed to a designated foundation will benefit reservist soldiers.