WHAT PASSES for justice in the class action lawsuits against life insurance companies continues to plod its tragic way through the courts. Tragic, because so many trusting people aren't being made whole.
I keep hearing from Prudential policyholders who feel that the mediation process, set up to right their wrongs, didn't come anywhere close to replacing what they'd lost.
On another front, a deadline is fast approaching for about 7 million policyholders of Metropolitan Life.
The MetLife lawsuit, like the suit against Pru and some other insurers, alleged a number of deceptive sales practices. Among them: replacing sound policies with unsound policies that didn't last; deceiving customers about the policies' possible future cost; and misselling tax-deferred annuities for IRAs and other retirement accounts.
MetLife says it did nothing wrong, and is settling only to avoid further litigation. On Dec. 2, a court will decide whether to approve the deal.
In general, you're included in the settlement if you bought a cash-value policy or tax-deferred annuity between Jan. 1, 1982, and Dec. 31, 1997, even if you gave up the annuity or let the policy lapse.
Before I go any further, however, I have an urgent message for MetLife policyholders. Some of you are in imminent danger of being misled.
In August, you were mailed a booklet, summarizing the settlement. On the cover, it says that you "must decide before November 2" whether to opt out of the deal (because you want to sue separately) or whether to make a specific claim for restitution.
You might assume that your reply has to be postmarked by that date, which is usually the case with class action settlements.
Not so. MetLife has to receive your decision by Nov. 2. If you haven't yet acted, send your reply right now, by an overnight courier service, not regular mail. Otherwise, any special claim will be shut out.
Inside the booklet, MetLife discloses that your reply has to be in hand by Nov. 2. But the statement on the cover makes it appear that you can wait a few more days, before you delve into the fine print.
MetLife's vice president for public relations, Kevin Foley, says there was no intention to mislead. "We took our best shot at having people understand," he says.
There's another way that I think the disclosures may confuse you. It involves MetLife's "general relief." That's what you get if you make no special claim or if your claim arrives at MetLife after Nov. 2.
Under general relief, everyone who bought a life insurance policy gets a tiny, extra policy. Everyone who bought a tax-deferred annuity gets a tiny accident-insurance policy (payable only if you die accidentally).
The packet you got from MetLife includes a "benefit voucher," stating the size of your extra benefit. An example I have says, "Estimated Settlement Death Benefit Amount: $3,125."
But this extra insurance will stay in force only for one to five years. The older you are, the less extra coverage you get and the sooner it will lapse.
When bragging about how much it's offering consumers, MetLife put the value of these general-relief policies at $778 million. That's what you'd pay for them if you bought them yourself.
But MetLife has to pay on these policies only when people die. When asked, Foley puts the true cost to the company at less than half of that amount.