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State Signs Off On MetLife Settlement

Oct 1, 2002 | Raleigh News

Nearly 54,000 North Carolinians are eligible to receive a portion of a $160 million settlement with a large insurance company that allegedly overcharged mostly black and poor policyholders for much of the 20th century.

Refunds will come from New York-based MetLife in a national settlement covering 1.8 million policies issued to African-Americans and other nonwhites from 1901 to 1972. In North Carolina, 53,523 policyholders are affected, with a total of $3.8 million in settlement benefits.

"Everyone is supposed to get no less than $10 and they can get more," said Chrissy Pearson, a spokeswoman for the state Department of Insurance.

The nationwide agreement between MetLife and the New York Insurance Department was reached in late August, settling a massive class-action lawsuit. State Insurance Commissioner Jim Long announced Monday that he had signed off on the North Carolina portion of the settlement.

Holders of an estimated 750,000 policies nationally are eligible to receive between $20 and $80, and holders of an additional 200,000 policies could receive $100 or more. Some policyholders may receive term life insurance as part of the settlement.

The settlement is also meant to compensate nonwhites, whom records showed were required to undergo medical exams and detailed background checks before buying policies. In cases where policyholders died, family members can receive compensation.

"This is about people who were wronged getting what they are owed," Pearson said. "The main goal is to get people aware there is a settlement so that if they think they were affected either as policyholder or as the beneficiary of a policy, they can call the 800 number and find out more."

MetLife did not officially acknowledge wrongdoing in the settlement. It is one of several insurers to settle lawsuits alleging discrimination against blacks in recent years.

In May, Unitrin, a Chicago life insurance company, agreed to pay $27 million to 500,000 black policyholders who alleged they were overcharged for burial insurance. Most of those policies were sold between 1930 and 1970.

And in 2000, American General Life and Accident Insurance Co. agreed to a $206 million settlement for allegedly overcharging for burial insurance to 9.1 million mostly poor, black policyholders, including 53,893 in North Carolina.

Under the MetLife settlement, holders or beneficiaries of certain MetLife policies may be eligible for benefits. They include:

Industrial policies issued from 1901 though 1964 with a face amount of less than $1,000.

Ordinary policies issued from 1901 though 1972 with less-than-standard risk classifications.

Metropolitan Series policies issued from 1960 to 1972 with face amounts between $4,500 and $5,000.

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