FARGO - Two insurance companies will settle a lawsuit accusing them of defrauding North Dakota policy holders, their attorney says.

Attorney Andrew Mytelka said Standard Life and Accident Insurance Co. and United Equitable Life Insurance Co. likely will pay $2.1 million to up to 9,000 North Dakotans who bought the companies' nursing home benefit policies

Standard Life would pay $2,005,000 and United Equitable would pay $95,000 under the arrangement, Mytelka said Friday during a hearing in East Central District Court.

The lawsuit, filed by 98-year-old Frank Rose of Park River, was set for trial on Tuesday.

In a civil suit filed on behalf of all North Dakota policy holders, Rose claimed United Equitable fraudulently sold him a long-term nursing care policy in March 1982.

United Equitable marketed the policy as having a fixed annual premium that policy holders could renew throughout their lives. Rose said his annual premiums increased from $418 in 1982 to about $1,900 in 2000.

The suit claims the premium hikes would be impossible for many policy holders to pay, depriving them of needed coverage as they age.

Standard Life, of Galveston, Texas, bought United Equitable's insurance business in 1986. Rose filed the suit against both companies in 2000.

The lawsuit says company officials knew they would have to adopt high premium increases to cover claims but withheld that information when selling policies.

In court records, the insurance companies say their long-term nursing care policies were "improperly underwritten and under priced." But they defend the premium increases, saying some of them were approved by then-North Dakota Insurance Commissioner Glen Pomeroy.

Rose's attorney, H. Patrick Weir of Bismarck, would not comment about the suit Friday. He said his client lives in a nursing home in Park River and still holds the policy over which he filed suit.

East Central District Judge John Irby called the proposed settlement "fair and adequate."

The court is expected to decide how the settlement money is distributed during a final settlement hearing in August.