SPOKANE – The Roman Catholic Diocese of Spokane and one of its main insurance carriers have agreed to a $5.25 million settlement in a dispute over coverage of clergy sex abuse claims.
The proposed settlement with General Insurance Co. of America, a subsidiary of Safeco Insurance, must be approved by federal district court and bankruptcy court judges, Shaun Cross, a lawyer representing the diocese, said Thursday.
“This proposed settlement will bring an end to the diocese’s legal disagreement with General about whether or not the company is obligated to provide insurance coverage for allegations of sexual abuse by clergy in the diocese,” Cross said.
Paul Hollie, a Safeco spokesman in Seattle, on Thursday confirmed details of the settlement announced by Cross, but said he could not make additional comments.
The diocese, which has filed for Chapter 11 bankruptcy protection because of sex abuse claims against clergy, has offered to settle the claims of 75 victims for $45.7 million. The General Insurance payment would be placed in an interest-bearing account and released in October 2007, when the diocese agreed to pay most of the victims’ settlement.
The proposed settlement with General Insurance is a step toward paying for the so-called “global settlement,” Cross said, adding that claims are still pending with five other insurance carriers.
“We’re hopeful that the other carriers … will see what Safeco is doing and will participate in the global settlement that we are trying to put together,” Cross said.
The settlement covers policies sold to the diocese between 1958 and 1972, Cross said. It would relieve General Insurance of future claims by other Catholic entities in the diocese, except the Morningstar Boys Ranch, which is operated by the diocese and has been the subject of abuse claims.
Church officials previously said they thought insurance policies might pay a total of about $15 million toward the abuse claim settlement.
“This is a major step toward healing and reconciliation,” said the Rev. Stephen Dublinski, diocese vicar general. “It also brings the diocese closer to resolution of its Chapter 11.”
The Spokane Diocese filed for bankruptcy protection in 2004, citing claims by abuse victims of about $81.3 million against assets of about $11 million.
The diocese serves about 90,000 Catholics in more than 80 parishes in 13 Eastern Washington counties, from Canada to Oregon.
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