Clal Insurance to Refund NIS 86 Million to Policyholders After Decade-Long Lawsuit

A decade after a class-action lawsuit was filed, the Central District Court has approved a revised settlement agreement with Clal Insurance, valued at approximately NIS 86 million. The lawsuit alleged that the company failed to provide Maccabi Health Fund members with a promised 20% discount on private long-term care insurance policies. The settlement includes NIS 35.3 million in reimbursements for past overcharges, including interest and linkage, and NIS 50.9 million in future discounts.

The settlement applies to individuals who purchased a private Clal long-term care policy between October 30, 2009, and December 31, 2018, with lifetime benefit eligibility, while also being insured under the "Maccabi Long-Term Care" group policy, and who did not receive at least a 20% discount. For the past period, a reimbursement mechanism based on a 16% discount on premiums will be applied from October 30, 2009, until the judgment becomes final. Actual discounts received will be deducted, and interest and linkage differences will be added to the reimbursement amount.

Clal Insurance will identify eligible individuals and calculate reimbursement amounts within 60 days of the judgment becoming final. Existing policyholders will be notified via email or SMS within 90 days, with payments directed to their updated payment method. Past policyholders, including those with settled policies or no ongoing premium payments, will be notified via email or SMS, or by mail if electronic notification is not possible. Their heirs are also eligible for notification and reimbursement.

For the future, eligible members will receive an 18% discount on their premiums as long as the policy is active and premiums are paid. This discount will supersede other discounts, except for underwriting discounts. If an individual is entitled to a higher discount from another source, they will receive the greater discount.

The original class-action request was filed in October 2016, alleging Clal Insurance breached its commitment to offer at least a 20% discount on private policies to Maccabi members. Clal Insurance disputed the interpretation and scope of the alleged entitlement, arguing the reduced rate applied only to policies purchased through a specific call center and for those with lifetime benefit eligibility. In January 2021, the court approved the case as a class action, finding a reasonable possibility that all Maccabi group policyholders were entitled to the 20% discount, regardless of purchase method, but only for policies with lifetime benefits.

Following complex mediation, the parties reached the revised settlement, approved by Judge Avi Gorman, who stated it concludes a decade-long process and provides significant financial relief. The court also ordered the settlement to be published on Clal's website. Attorney Yaniv Statis, representing the plaintiff, expressed satisfaction with the settlement, highlighting its tangible economic benefit for policyholders and the importance of class-action lawsuits.