New York slaps MetLife with $19.75 million in penalties for heel-dragging

State says insurer owes $189 million to thousands of insureds, beneficiaries

Jan 29, 2019 @ 12:46 pm

By InvestmentNews

MetLife Insurance Company will pay a $19.75 million penalty for violating New York insurance law by failing to properly locate and pay benefits to thousands of insureds and beneficiaries in the state.

As part of a consent order with the state's Department of Financial Services, MetLife also will pay retroactive benefits to policyholders in New York and elsewhere totaling more than $189 million. MetLife already has paid $123 million of that to consumers whose group annuity benefits had been lost or delayed, the regulator said in a release.

(More:How advisers can help 401(k) plans manage the risk of missing participants)

Also agreed to by the insurer are $63 million set-aside to pay expected death claims, $1.85 million in monthly payments to consumers to complete a group annuity remediation process, and $1.5 million in restitution to consumers whom MetLife failed to provide with accurate comparisons of fees and expenses when transferring from an existing to a new variable annuity contract.

During the 1992-2007 period covering the violations for which MetLife was cited, the insurer improperly released reserves for 13,712 group annuity certificates, regulators said, resulting in a subsequent reserve increase of more than $500 million.

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