MetLife To Pay $60 Mln Fine To Settle License Violations

(RTTNews) - Insurance provider MetLife, Inc. (MET) agreed Monday to pay $60 million as fine to settle charges related to two of its subsidiaries selling insurance in New York state without the required license.

The settlement was announced by Superintendent of Financial Services Benjamin Lawsky following investigations by the New York State Department of Financial Services (DFS) and the Manhattan District Attorney's Office.

Two of Metlife's subsidiaries, which were acquired from American International Group, Inc. (AIG) in 2010, were charged of soliciting insurance business in New York state without a license and made intentional misrepresentations and omissions to the department about the activities, saying it "does not solicit business in New York."

"Insurers have a responsibility to follow the law, play by the rules, and be honest with their regulators. Our Department will continue to aggressively investigate and pursue wrongdoing within this industry wherever we uncover it. MetLife did the right thing by stepping up to resolve this matter," Lawsky said in a statement.

The settlement will see Metlife pay $50 million to the DFS and $10 million to the Manhattan District Attorney's Office.

New York-based MetLife had acquired the two subsidiaries, American Life Insurance or ALICO, and Delaware American Life Insurance or DelAm, from AIG in 2010 for about $16 billion. However, the misconduct dates back as far as 2007.

The investigations revealed that the subsidiaries conducted extensive insurance activities from their offices in New York and generated about $900 million in premiums from selling and renewing insurance policies to large multinational companies for employees working overseas from 2007 to 2012.

Under the settlement agreement, the DFS is also requiring that MetLife take immediate steps to come into compliance with New York Insurance Law.

However, the investigation related to insurance law violations by AIG, ALICO, and DelAm, and other AIG subsidiaries and affiliates prior to MetLife's acquisition in 2010 are ongoing and remains unresolved.

MET closed Monday's regular trading session at $52.80, up $0.24 or 0.46% on a volume of 5.26 million shares.