The suit against the $965 million Black Hills Federal Credit Union and CUNA Mutual alleging improper increases in credit life disability insurance rates was remanded Aug. 14 by the South Dakota Supreme Court back to a lower court to be tried as a class action suit.

The original complaint was filed Edward D. and Kathy L. Thurman, who obtained a closed-end home equity loan in 1995. The suit alleges the Rapid City, S.D.-based credit union and Madison, Wis.-based insurer make illegal changes to the credit disability insurance policies of 4,461 borrowers without adequately notifying the borrowers of the change, according to court documents. 

The Thurman's policy specified the couple would pay $4,140.79 over the 15-year life of their $30,114. 47 loan, or $0.14 for every $100 of the outstanding loan balance. In July 1999, BHFCU unilaterally changed its group credit disability insurance policy, not just the rate as authorized by the contract, the documents said.