Missouri ready to share $160 million settlement over life insur

ST. LOUIS -- More than 55,000 Missourians who were charged extra for life insurance because they were minorities could receive $4.8 million as part of a national settlement with Metropolitan Life Insurance Co., Gov. Bob Holden said Friday.

The settlement, which received preliminary approval from the U.S. District Court for southern New York, could provide compensation of up to $160 million nationally. The settlement reaches back to policies issued in 1901 and could affect as many as 1.8 million policies.

Final approval is expected in February, when all 50 states agree to the terms, said Missouri Department of Insurance General Counsel Eric Martin. Missouri's insurance department joined with the New York Department of Insurance in the settlement, which affects policyholders in 50 states and the District of Columbia.

Also as part of the settlement, Metropolitan Life must donate $5 million to the United Negro College Fund and spend $6 million on print, radio and television advertising to reach potential beneficiaries.

About 30,000 of the Missouri cases involved low-income residents in the St. Louis area, where Holden announced the settlement Friday afternoon.

"The worst vestiges of racism in this country and the insurance industry have eased or ended, but our Department of Insurance is vigorously pursuing restitution for these kinds of abuses that took advantage of low-income, minority Missourians," Holden said.

Claimants can get a potential five extra years of death benefits, or cash payments, which are expected to average between $20 and $80, Martin said.

The small sum should not prevent people from claiming part of the settlement, he said.

"It's not a huge sum of money but it's worth sending the message to these companies that this will not be tolerated," Martin said.

The investigation began after evidence surfaced that blacks and other minorities were paying higher premiums than whites for the same coverage.

The cases involved small-face-value life contracts known as industrial life or burial insurance that were sold door-to-door and paid in weekly or monthly premiums by low-income residents.

Involved are industrial life policies issued from 1901 to 1964 of less than $1,000 face values; ordinary life policies from 1901 to 1972 for nonstandard risks; and so-called "Metropolitan Series" policies issued from 1960 to 1972 with face values of $4,500 to $5,000.

Metropolitan Life is sending settlement notices to all non-Caucasians listed in its files with active policies, beneficiaries of those who died in the past seven years and others whose policies terminated since January 1989.

For others who are eligible to participate in the settlement, claim forms will be due by April 23.

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Those seeking information about the settlement can call the Settlement Administration Center at 1-800-582-8748 or TDD/TTY at 1-866-863-9528. Assistance is available through the Missouri Department of Insurance at 1-800-726-7390. Information can also be obtained from two Internet sites.

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On the Net

Settlement Administration Center: http://www.lifesettle.com

Department of Insurance http://www.insurance.state.mo.us