Black Hills FCU, CMFG Life Insurance Agree to Settlement in Lawsuit Over Improperly Raised Premiums

Black Hills Federal Credit Union and a Wisconsin-based insurance company, CMFG Life Insurance Company, have agreed to pay $3 million to settle allegations that they improperly raised insurance premiums on thousands of loans, according to The Associated Press on Monday.

The proposed settlement to be considered by a judge later this month would resolve an eight-year-old class action lawsuit initially filed by a Rapid City couple.

Edward and Kathy Thurman got a $30,000 home equity loan from the credit union in 1995 and bought a disability insurance plan offered by CUNA Mutual Insurance Society (now CMFG Life Insurance Company). The couple sued after the credit union and the insurance company failed to improperly inform them their disability insurance premium was increasing.  

They gained class action status after taking the matter to the South Dakota Supreme Court. So, the settlement involves 4,461 loans. Kathy Thurman died in 2016.

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