June 18, 2004

Washington, DC - The Armenian Assembly of America this week, on behalf of the Armenian National Institute and certain other individuals, challenged a proposed class action settlement reached in the California case of Marootian, et al. v. New York Life Ins. Co. (Marootian), on several grounds, including that it could potentially preclude New York State from pursuing the abandoned proceeds of Genocide-era life insurance policies. The Assembly also recently retained a noted class action litigator with New York-based Kaplan, Fox and Kilsheimer LLP, to analyze the proposed settlement agreement.

"We are concerned that the language in the California settlement may be construed as so broad as to preclude the New York State Abandoned Property Initiative," said Aram Kaloosdian, Vice President and Counselor to the Assembly Board of Trustees and Chairman of the Armenian National Institute.

In 2001, the Armenian Assembly urged the New York Office of State Comptroller to investigate whether New York Life violated New York State abandoned property laws by not turning over to the State the proceeds of abandoned Armenian Genocide-era life insurance policies.

New York law provides that, if no address of the insured or apparent beneficiary can be "ascertained...such person's last known address shall be presumed to be within this state if unclaimed funds are held or owing by life insurance corporations organized under the laws of this state." New York Life is incorporated in the State of New York. Under the New York law, New York Life may be liable for penalties and accrued interest.

Recently, one of the Marootian plaintiffs' attorneys, writing to the Assembly in response to the Assembly's inquiry whether the proposed California settlement precludes New York State Initiative, wrote that the "matters would seem to have little overlap." But he added that they "do not know whether the proposed settlement in the class action would have any effect." "If we are advised by the Court that the California settlement does not preclude our Initiative, then we will withdraw our challenge," said Kaloosdian.

On February 19, 2004, Judge Christina A. Snyder preliminarily approved the settlement agreement reached between the parties in the Marootian case and set July 30, 2004, for the final fairness hearing. The settlement, if finally approved, would require New York Life to pay $20 million dollars, of which $11 million was allocated to pay the heirs or beneficiaries, $4 million to the plaintiffs' attorneys, $3 million to various organizations, and $2 million allocated for settlement implementation and administration.

In a filing with the Court, the Assembly stated that the settlement agreement is too broadly defined to include "all other persons having claims of any nature under life insurance policies." Such a provision could affect the New York State Abandoned Property Initiative, and specifically, whether New York Life complied with state laws and regulations regarding abandoned life insurance proceeds.

The Assembly letter to the Court also stated that "it is likely that persons entitled to the proceeds of the life insurance policies at issue are deceased. Accordingly, such proceeds would be considered abandoned property and should escheat to the State of New York, in accordance with the public policy of New York."

The Armenian Assembly of America is the largest Washington-based nationwide organization promoting public understanding and awareness of Armenian issues. It is a 501(c)(3) tax-exempt membership organization.