Customers v CCC Information Systems Inc.
CCC Class Action Settlement Agreement Announced
CCC Information Services Inc., a subsidiary of CCC Information Services Group Inc., announced July 13, 2005 it and 15 of its customers signed a settlement agreement with the plaintiffs in various class action suits pending in Madison County, Illinois. The consolidated suits relate to the valuation of vehicles that have been declared total losses by insurers. The lawsuit alleged the insurance companies used a computer system to routinely pay below-market claims when vehicles were declared total losses.
CCC Information Services Group Inc. (NASDAQ: CCCG), headquartered in Chicago, is a leading supplier of advanced software, communications systems, Internet and wireless-enabled technology solutions to the automotive claims and collision repair industries.
Those that were eligible to make a claim were policyholders who received a payment for a total-loss vehicle claim between Jan. 28, 1989, and July 18, 2005, and whose vehicle value was calculated by CCC Information Services Incorporated.
The proposed classes represent all customers of the settling carriers who had a total loss claim from January 28, 1989 to the present, for which CCC's product and service (now called CCC Valuescope(R)) were used to perform the valuation. The total amount the insurance companies will pay to policyholders depends on the number of people making claims.
Terms of the settlement agreement will require CCC to pay notice and administration fees and other costs associated with the settlement. The Company estimates that these costs will total approximately $8 million, and including available insurance proceeds of $1.8 million, the Company is fully reserved for these payments. Other settlement costs, including claims by class members, will be paid by the insurance companies that are participating in the settlement. In addition to its settlement contribution, CCC will also engage the services of an independent, third party as a Court-appointed monitor to periodically review CCC Valuescope's methodology for five years following settlement and to oversee the performance of various product validation studies.
The settlement itself is subject to Court approval, and a motion seeking preliminary approval of the settlement was filed with the Court today. Notice to members of the settling classes will then be issued, and the Company anticipates that a final approval hearing will take place before the end of 2005.
