MetLife Agrees To Pay Fla. $7.5M
TALLAHASSEE, Fla. (AP) _ Metropolitan Life Insurance Co. has agreed to pay Florida $7.5 million in the wake of its agreement to spend $1.7 billion to settle a national lawsuit by customers who accused the insurer of deceptive sales tactics.
The settlement announced Thursday by the state insurance department is the second largest with an insurer in Florida.
Prudential Life Insurance Co. of America, the nation’s largest life insurer, paid a $15 million penalty to Florida three years ago to settle similar allegations. John Hancock Mutual Life Insurance Co. paid $6 million that fall. Eight American General Corp. insurance companies paid Florida $5.5 million last May.
The state started investigating MetLife nearly three years ago as part of a broader probe into industry-wide practices such as churning. That’s when the value of a life insurance policy is drained in order to finance the sale of a new policy _ and the agent’s commission.
Three MetLife companies were involved: Metropolitan Life Insurance Co., Metropolitan Insurance and Annuity Co. and Metropolitan Tower Life Ins.
MetLife denies any wrongdoing, company spokesman John Calagna said from his New York office. The company has not agreed to pay penalties in any other state, Calagna said.
In addition to the state penalty, MetLife will use a state program to help victims seek restitution. That will take place in conjunction with the $1.7 billion settlement of the national lawsuit.
That settlement was approved by a federal judge in Pittsburg two months ago. As part of that settlement, MetLife will enhance the value of the policies of all seven million people across the country who bought or held policies from 1982 through 1997.
Some 433,000 of those policy-holders lived in Florida.
Customers who believe they were misled by MetLife agents must file claims and go through an arbitratror.