‘DEAD PEASANT' POLICIES

By L.M. Sixel / Houston Chronicle

Irma Johnson never really thought of herself as a crusader.

But the quiet widow from The Woodlands has been featured in a Michael Moore movie, watched her story retold on Good Morning America and is trying to let others know that their employers may have purchased secret insurance policies on their lives and stand to profit handsomely when they die.

The industry darkly refers to the policies as “dead peasant” life insurance.

And but for a post office error, Johnson might not have learned that when her husband, Dan Johnson, died of brain cancer in 2008, the bank that had fired him years earlier got $4.7 million in insurance proceeds on his life.

After accidentally destroying an envelope containing a check for nearly $1.6 million made out to Amegy Bank, the post office misdirected it to Johnson's home because Dan Johnson's name also was on the check.

Her attorney, Mike Myers of McClanahan Myers Espey in Houston, said she wasn't supposed to know that Amegy had the insurance policy on her husband, a project manager whose annual salary had been about $70,000.

“How could they be profiting off my husband?” Johnson asked recently during an interview with the Chronicle.

Myers filed a lawsuit on her behalf and forced the bank to reveal it bought policies in 2001 on more than 40 bankers, including coverage on Johnson — who had been diagnosed with terminal brain cancer about 18 months earlier and been out sick for several months.

Myers is trying to force Amegy to reveal the names of those other bankers. A hearing is scheduled for later this month, but in the meantime, Amegy officials are planning to meet with Johnson today to try to reach a settlement. She's asking for the net proceeds Amegy received, $3.8 million — the death benefit minus the premiums it paid.

Amegy Bank spokeswoman Leigh Akin said she can't comment specifically and referred all questions to the bank's formal response in the lawsuit.

In that document, the bank said it purchased life insurance policies on a group of vice presidents and other officers to offset the cost of providing employee benefits.

Amegy said taking out such policies is a “common practice among banks and other industries and is recognized and permitted by the applicable banking regulatory authorities.”

The policies were voluntary, the bank noted, and Dan Johnson understood that he would be covered indefinitely, even if he left the bank.