Metropolitan Life Insurance Co. has finished its acquisition of General American Life Insurance Co., with $1.2 billion from the sale going to the latter company's policyholders.

General American Life, based in St. Louis, began seeking a buyer last summer after it could not pay $6.8 million in cash obligations owed to 37 institutional investors. At that time, the Missouri Department of Insurance (DOI) placed the company under voluntary administrative supervision.

The $1.2 billion MetLife paid for the company will go into escrow, where it will be distributed among an estimated 330,000 policyholders by the end of 2002. "We acted last summer to protect the interest of those policyholders," says Keith Wenzel, director of the Missouri DOI. "The closing of the sale guarantees that they will receive fair value for their stake in General American."

McConnell says the department will work to devise a formula that constitutes a fair distribution of revenues among policyholders according to their policies' value. "Obviously, no two policies are the same," says Randy McConnell, spokesperson for the Missouri DOI.

General American policies are not affected by the transaction and remain in-force, according to MetLife. General American's headquarters will remain in St. Louis.