Insurance Commissioner Dave Jones Announces 27 States Join MetLife Settlement Agreement
News: 2012 Press Release
Insurance Commissioner Dave Jones today announced that twenty-seven states have signed onto a multi-million dollar settlement with Metropolitan Life Insurance Company, Inc. (MetLife) negotiated by California and five other lead states. The settlement resolves allegations of improper practices by MetLife in the payment of benefits under life insurance policies. The settlement became effective when twenty states signed.
"I am gratified that so many other state regulators have joined in signing this important agreement so we can move forward in helping consumers," said Commissioner Jones. "This will give piece of mind to MetLife policyholders and beneficiaries across the country, knowing that they can expect their life insurance benefits to be there when the time comes."
MetLife has agreed to strict business reforms to ensure it quickly pays out life insurance benefits. It is anticipated that upwards to $500 million in benefits will be paid out pursuant to the settlement. The company will also pay $40 million to state insurance departments.California 's share of the settlement has not yet been determined but is expected to be approximately $3.5 million. The agreement was developed in tandem with an agreement by California State Controller John Chiang. That agreement is expected to deliver millions of dollars in death benefits to state controllers' offices, who will then seek to find the beneficiaries and pay them their benefits.
The settlement requires MetLife to run the Social Security Death Master File or similar database monthly to determine whether its life insurance policyholders, annuity owners, and holders of retained asset accounts (accounts holding insurance benefits paid to beneficiaries) have died. If MetLife learns that a policyholder died, it must conduct a thorough search for beneficiaries, using contact information in its records and online search locator tools. If MetLife does not find a beneficiary within a year of learning of a death, it must transfer the benefit to the appropriate state controller as unclaimed property.
The business reforms to which MetLife agreed end the company's decades-long practice of improperly holding onto life insurance benefits that should be paid to its customers' survivors and loved ones. It is expected that millions of dollars more per year will be put into the hands of beneficiaries that otherwise would have remained in MetLife's coffers.
This settlement represents the culmination of a year-long investigation by Commissioner Jones and other state insurance regulators into MetLife's practices. In May 2011, Commissioner Jones held an investigatory hearing on MetLife's practices, in which he was joined by Controller Chiang and representatives of theFlorida and Minnesota departments of insurance. Following that hearing, Commissioner Jones joined forces with the insurance departments of Illinois , which acted as managing lead state, and Pennsylvania , Florida , New Hampshire and North Dakota to further investigate MetLife.
Additional states have until June 29 to decide if they want to participate in the Settlement.
Commissioner Jones, in coordination with the other states, achieved a similar settlement with Prudential Life Insurance Company earlier this year. In that agreement, Prudential agreed to similar business reforms and paid $17 million to state insurance departments.California 's share was more than $1.5 million. Fifty-one insurance departments signed that agreement.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.