Claims
Milliman to Pay $15.5M to Settle Life Insurance Data Accuracy Lawsuit
By Insurance Wire Staff, . Insurance Wire.
Milliman Inc., a major risk management and actuarial consulting firm, has agreed to pay $15.5 million to settle a consumer class action lawsuit accusing it of providing inaccurate information to life insurance companies, according to Law360 Insurance Authority, which reported that plaintiffs filed the proposed settlement Monday for preliminary approval in Washington federal court.
What the case is about
The lawsuit targets Milliman's role as a data provider to life insurers. Consumer reporting companies like Milliman compile and sell information that carriers use when deciding whether to issue a policy and at what price. The plaintiffs alleged that Milliman's data was flawed, and that those errors affected real people seeking life insurance coverage.
The legal theory rests on the Fair Credit Reporting Act, or FCRA, a federal statute that sets accuracy and dispute-resolution requirements for companies that assemble and sell consumer data. FCRA claims in the insurance context are less common than in credit or employment screening, which makes this settlement notable for carriers and their data vendors alike.
Why this matters beyond the dollar figure
The $15.5 million figure is the headline, but the more consequential question for the industry is what the case signals about liability exposure for third-party data vendors that feed underwriting decisions. Life insurers routinely rely on outside firms to supply health histories, prescription records, motor vehicle reports and other consumer data. If those vendors face class-action FCRA exposure when their data contains errors, the cost of that risk may eventually be priced into vendor contracts or absorbed by carriers through indemnification disputes.
Milliman is one of the largest actuarial and analytics firms in the world, so a $15.5 million settlement is unlikely to be financially material to the company. The reputational and precedent dimensions are a different matter. A settlement at this scale, in a class action, confirms that plaintiffs' lawyers see FCRA as a viable vehicle for challenging insurance data vendors, not just credit bureaus.
What is still unknown
Law360 Insurance Authority's report does not detail how many class members are covered, what specific data errors were alleged, or what changes, if any, Milliman agreed to make to its data practices as part of the settlement. Preliminary approval is the first step; a federal judge must still find the deal fair and reasonable before it becomes final, and class members typically have an opportunity to object or opt out.
For carriers that use Milliman or similar vendors, the practical question is whether their vendor agreements include representations about FCRA compliance and indemnification provisions that would shift liability if a similar claim arose from data they purchased.
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