NEW YORK -- Attention all customers of the Metropolitan Life Insurance Co. Now is the time to reflect on whether you were misled, if you bought insurance under the guise of a savings plan, and what you want to do about it. The deadline is nearing for a class-action settlement that can get you your money back. You have until June 13 to act.
Even if you don't have a MetLife policy, the restitution rules will interest you, because they show you one way of spotting deceptive sales.
The lawsuit was filed in Florida last November, on behalf of three nurses who were sold a "retirement plan." They thought they were making monthly deposits into an annuity. In fact, they were paying premiums on cash-value life insurance.
The policies did build up some savings, but annuities would have delivered much more. When the nurses discovered the deception, they hollered "foul."
In April, a federal court in Tampa ruled that the settlement negotiated for the nurses will apply to any MetLife customer similarly deceived. The court hasn't yet approved the settlement. But it appears that those who don't want to keep their insurance policies will be able to switch to a MetLife annuity or get their money back plus interest (in either case, the interest will be taxable).
Information about the settlement was mailed to 70,000 MetLife policyholders early in May. You must respond in writing by June 13 to be included. If you miss the deadline, you do not get a second chance and will not be permitted to sue on your own.
Inevitably, many deserving people will be left out. They might have thought the letter was junk mail and thrown it out. They might not have understood what they read. They might not even have gotten the letter, because they moved or because their name didn't make the mailing list.
Also, the letter is murky on a critical point. It says you can be included in the settlement if you thought you were buying a retirement or other type of savings plan and the agent didn't "fully" disclose that the product was life insurance.
What if the agent presented it as a retirement or college savings plan but conceded, if you asked, that it had an "insurance component" (a common ploy)? "I don't think that knocks you out of the settlement," says attorney Ron Parry of Covington, Ky., who brought the lawsuit. The letter, however, doesn't explain that.
You would not be entitled to a refund if your agent said, "here's a life insurance policy and, by the way, it builds cash values which you can use for various purposes including retirement." Then, full disclosure was made.
Here's one way of identifying what might be a misleading sale, by a MetLife agent or anyone else: The agent approached you to buy a "savings plan," into which you "deposited" even sums, like $65, $100 or $150 a month. The life-insurance policy you received was for an odd amount, like $127,346. True life insurance clients normally purchase even-numbered policies, like $150,000, for which they pay an odd-numbered premium.
To be eligible for the settlement, MetLife customers have to have bought a whole-life policy from Jan. 1, 1990, through October 1993. If you bought through MetLife's Tampa office, where the scam originated, refunds can go back to January 1988.
You are eligible even if you canceled your policy or let it lapse. For a claims package, call MetLife's claims administrator at (800) 566-6365. If you fall outside the dates above, you can still bring your own lawsuit.
Some policyholders might prefer not to join the class action and instead bring a lawsuit of their own. Attorney Kenneth R. Behrend of Pittsburgh, who is representing several MetLife clients, says that in Pennsylvania they can get triple damages under the state's consumer-protection law.
To be eligible to file your own lawsuit, however, you must write to MetLife's claims administrator at P.O. Box 9372, Garden City, N.Y. 11530, by June 13 -- specifically excluding yourself from the class (keep a copy of the letter). Include your name, address and MetLife policy number. If you miss the deadline, the settlement covers you, like it or not.
In Texas, that may not be the last word. Texas insurance commissioner Robert Hunter thinks that MetLife's settlement letter hasn't gone to nearly enough people. "You might be paying an odd amount per month and still were misled" he says. He's negotiating with MetLife to expand restitution in Texas to thousands more.