Former participants of an Iowa Association of Business and Industry (ABI) group life insurance plan have begun receiving mailed notices of a proposed settlement outlining how $32 million in stock and investment income would be distributed.

Under the proposed settlement, which Polk County District Judge Scott Rosenberg approved on Aug. 13, three groups of ABI member companies that participated in the group insurance program would receive assigned percentages of the distribution. The largest portion, 89 percent, would be distributed to ABI member companies that participated in the plan between 1946 and 1987. The distributions would also be weighted according to the average employment of the companies during the covered periods.

EFCO Corp., a Des Moines manufacturer, brought the class-action suit in January 2006 against ABI, after ABI divested more than 870,000 shares of Principal Financial Group Inc. stock it received following the demutualization of Principal Mutual Life Insurance Co.

In April, a jury decided that ABI had deprived its member companies of more than $41.9 million in potential investment income by placing proceeds from the stock sale into a trust account. Rosenberg ruled on May 6 that ABI owed the class an additional $5.6 million based on the value of the stock at the time of the trial. The parties reached a negotiated settlement for $32 million in late May.

The settlement agreement states that “EFCO, as the class representative, believes that a substantial recovery has been made for class members and the best that can be done is to establish a plan that, without being too complicated, yields the best possible outcome under the circumstances.”

The court has set a final hearing concerning the fairness of the plan for Oct. 17; those wishing to provide testimony at the hearing must contact the third-party administrator by Oct. 3.