About 30,000 low-income St. Louis residents could benefit from a part of a $160 million national settlement with Metropolitan Life Insurance Co.
Missouri Gov. Bob Holden announced Friday that more than 50,000 Missourians who were charged higher life insurance premiums because they were minorities could be eligible for compensation. Missouri’s portion could be $4.8 million.
The settlement reaches back to policies issued in 1901 and provides full compensation for those who paid more because of race-based pricing and underwriting on as many as 1.8 million policies, Holden said.
Life insurance policies involved include those issued from 1901 to 1964 of less than $1,000 face values; ordinary life policies from 1901 to 1972 for non-standard risks; and “Metropolitan Series” policies issued from 1960 to 1972 with face values of $4,500 to $5,000, Holden said.
The Missouri Department of Insurance began investigating MetLife after it found evidence that blacks and other minorities were paying higher premiums than whites for the same coverage, although the practice was illegal. The policies typically 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 installments by low-income residents.
“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 in a statement.
MetLife is sending settlement notices to all non-Caucasians in its files with active policies, to beneficiaries of those who died in the past seven years and to others whose policies ended since January 1989.