July 26, 2001 | Read Time: 1 minute
By JANET L. FIX
After ruling that perhaps hundreds of thousands of people who bought life-insurance policies from Lutheran Brotherhood can be part of a lawsuit accusing the nonprofit fraternal group of fraud, a federal judge put the case on hold to give the insurer time to challenge his ruling.
The rulings came as Lutheran Brotherhood, in Minneapolis, announced plans to merge with Aid Association for Lutherans. The Appleton, Wis., association also faces lawsuits filed by policyholders who contend they were victims of fraudulent business practices.
The merger, which requires government approval, would create a financial-services group with nearly $60-billion in assets.
Several dozen people who bought policies from Lutheran Brotherhood and the Aid Association for Lutherans sued the companies, claiming that agents sold them life insurance with annual premiums that were supposed to end after 5 or 10 years. They allege that the premiums did not stop as agents had promised (The Chronicle, March 22).
Last month, U.S. District Court Judge Paul A. Magnuson made all Lutheran Brotherhood customers who may have been deceived by agents selling the disputed life insurance policies part of the lawsuit, meaning they would share in any money awarded through a court judgment.
John Newcomer, a lawyer in Tampa, Fla., who represents Lutheran Brotherhood policyholders, contends that as many as 500,000 people were deceived.
Deborah-Ely Lawrence, a spokeswoman for Lutheran Brotherhood, said that its customers were not deceived and that the lawsuits have no merit.
