Trustmark National Bank settled out-of-court its two-year legal battle with two former customers over force-placed auto insurance.
The case was notable because it garnered one of the largest punitive damage awards in history, $38 million, in addition to $500,000 in actual damages.
The award, to customers Charles Smith and Jesse Holmes, was later reduced on appeal to $5 million.
Trustmark officials said the terms of the settlement were confidential. The original judgment against Trustmark in the case has been dismissed.
"We are very pleased to get this case behind us," said chairman Frank Day, in a statement.
More than a dozen Mississippi banks have been hit with similar suits since the January 1995 verdict against Trustmark.
Jackson-based Trustmark is still the subject of a class-action suit on accusations similar to ones raised in the Smith-Holmes lawsuit.
Mr. Smith and Mr. Holmes, Mr. Smith's father-in-law, brought the suit against $5 billion-asset Trustmark in 1994 after the bank bought car insurance in Mr. Smith's name for a car the pair financed through Trustmark. The premiums on the insurance were higher than what could have been obtained elsewhere, and the $9,500 in premiums - more than the original car loan amount - were tacked onto the loan balance. The trial jury concluded the bank had bought the insurance without notifying the borrowers.
Lawrence Abernathy, the Mississippi lawyer who brought the case, did not return calls seeking comment.
