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When a big insurer--then named State Mutual Life Assurance Co. of America--went public last October, selling 12 million shares at $21 apiece, it also distributed 37.5 million shares free to its policyholders. Some 30 million of the shares in policyholders' hands have not yet been unloaded. This "overhang," say some market watchers, is depressing the stock price unduly and may be scaring away potential buyers.

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