The Alberta Investment Management Corp. will share in a $219-million US settlement from Genworth Financial after helping lead a class-action suit against the U.S. insurance company.
Edmonton-based AIMCo and California-based Fresno County Employees' Retirement Association sued Genworth for making false and misleading statements about its long-term care insurance operations.
Genworth reported a loss of $1.04 billion for the full year 2014 and losses continued into 2015 as it set aside reserves to cover claims. The class action alleged executives of the Virginia-based company failed to disclose upcoming losses related to reserves on its long-term care business in conference calls and meetings with investors.
Between October 30, 2013 and November 5, 2014, Genworth assured investors that it had conducted a deep and thorough review of the reserves it had set aside to cover long-term care claims and that the reserves were adequate, according to an AIMCo press release.
On Nov. 5, 2014, Genworth announced that it would have to take a $531 million charge to shore up its long-term care business sending its stock into a downturn.
Genworth agreed to the settlement at a U.S. court in Virginia without admitting to any wrongdoing.
"This excellent recovery once again demonstrates AIMCo's commitment to policing the financial markets on behalf of its clients and obtaining substantial recoveries," said lead counsel Dominic Auld.
The two plaintiffs have been fighting for two years to obtain a settlement and it comes just weeks before the class action case was slated to go to trial.
AIMCo has $90 billion Cdn of assets under management on behalf of 26 pension, endowment and government funds in Alberta.