After two hours of deliberations, a federal jury in Missouri awarded $34.3 million to State Farm policyholders in a class action trial. The class action was brought on behalf of approximately 24,000 current and former owners of universal life insurance policies issued in Missouri. Universal life insurance is a type of life insurance that includes an interest-bearing savings account from which the insurer deducts money each month to cover the cost of the life insurance. The jury found that State Farm systematically overcharged its policyholders for 23 years.
“We are very pleased with the jury’s verdict,” said John Schirger, one of the trial lawyers, who has represented policyholders in over a dozen similar cases. “It represents 97% of the damages we requested. The jury was very attentive to the details of complex actuarial concepts and mathematics and rendered a verdict that will restore lost account values to approximately 24,000 Missourians.”
In a pretrial ruling, the Court determined that State Farm violated the Form 94030-25 policy as a matter of law. The jury was asked to determine if the violation caused damages to policyholders and, if so, the amount of those damages. The trial lasted three days. If the award is affirmed on appeal, class members will be notified of the right to share in the settlement at a later date.
“This is a great story of the little guy taking on a huge company and winning” said Norm Siegel, who delivered the opening and closing arguments to the jury. “The most egregious aspect of these cases is that there is no reasonable way for a policyholder to know that they’re being overcharged because the overcharge is hidden behind a complex, actuarial ‘cost of insurance rate’ that is indecipherable to the average person. You have to hire a lawyer and actuary to deconstruct that rate and compare it to the proper rate to know you’re being damaged. You can be overcharged for decades without knowing, which is what the jury found here.”
Stueve Siegel Hanson and Miller Schirger are prosecuting several other cases of life-insurance policyholders who it is alleged have been overcharged across the country. The firms have obtained settlements making available relief valued at over $2 billion to policyholders.