Unfortunately, the matter has never been completely settled.
The IRS's position was and is that the stock has a zero tax basis, so when it is sold the entire net proceeds are treated as a capital gain.
Most taxpayers didn't receive enough shares of the stock to warrant the time & cost to pursue the matter in Court.
However, the matter has been litigated with varied results. Here's a summary of the status of the court cases that I found while researching the matter:
One court has agreed with the IRS position that the taxpayer has a zero tax basis and the entire sale proceeds are subject to capital gains. Reuben v. U.S., 2013 PTC 74 (C.D. Calif. 2013). At the other extreme, the court in Fisher v. U.S., 2008 PTC 2 (Fed. Cl. 2008), aff’d, 333 Fed. App’x 572 (2009) permitted the taxpayer to use his basis in the entire insurance contract as his basis for the stock. This approach should usually result in the avoidance of any capital gains tax. And a third court has taken a complicated in-between approach: Dorrance v. U.S., 2013 PTC 34 (D. Ariz. 2013).
So the bot***** *****ne is that the rulings are all over the place. However, the IRS has maintained the "zero basis" theory and as I said earlier, most taxpayers don't have enough stock to make a court case worthwhile in terms of time & cost of representation.
The suggested approach right from the beginning was to use a zero basis for reporting the gain on your tax return and then file a claim for refund in order to avoid the expiration of the 3 year statute of limitations for filing a refund claim. Since as you pointed out the de-mutualization occurred many years ago, unless a refund claim was filed at that time to protect your right to a refund if the IRS acquiesced to a court decision favorable to the taxpayer, I'm afraid that you are beyond the time for filing a refund claim now. However, unless you were prepared to litigate the matter, at this point it wouldn't make any difference anyway as the IRS has not acquiesced to anything and maintains that the zero basis is correct.