Madoff-Linked Insurance Policyholders Win Settlement

Sep 3 2009 | 12:46pm ET

A pair of insurance companies, one affiliated with Ponzi scheme-scarred Tremont Group Holdings, have settled a policyholder lawsuit over losses in the Bernard Madoff scandal.

Argus Group Holdings and Tremont International Insurance, which both invested in Tremont Madoff feeder funds, have agreed to offer low-interest loans to policyholders whose policies may lapse; the 100 or so policies used their Madoff investment returns to pay premiums. The settlement, which still requires the approval of U.S. District Judge Thomas Griesa in Manhattan, includes no cash payments.

In return for the settlement, Argus and Tremont International will assign their legal claims in the Madoff case to a litigation trust.

“The settling parties intend to fully, finally and forever resolve, discharge, dismiss and settle the claims against the Argus defendants,” the settlement proposal said.

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