NU Online News Service, Nov. 7, 2002, 2:24 p.m. – Missouri Gov. Bob Holden today said MetLife Inc., New York, has agreed to pay up to $4.8 million to 55,172 Missourians to compensate for charging higher life insurance premiums solely because the policyholders were racial minorities.
The settlement is the latest in a series of race-based premium investigations conducted by the Missouri Department of Insurance, St. Louis.
The department says it began its inquiries began after it received evidence that African-Americans and other minorities were paying higher premiums than whites for the same coverage, long after court cases concluded that such contracts were illegal.
The alleged abuses usually 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, the insurance department says.
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The Missouri Department of Insurance says it joined the New York Department of Insurance in the MetLife case, which affected minority policyholders in all 50 states and the District of Columbia and could provide compensation up to $160 million nationally.
The U.S. District Court for southern New York has given preliminary approval to the settlement, but it still must sign off on the final documents, said Scott B. Lakin, the Missouri Department of Insurance director.