The life insurance giant has agreed to a multistate settlement following regulator allegations among many states.
MetLife Inc., the massive company that provides life insurance to millions of individuals across dozens of states, has announced that it will make approximately $438 million in payments toward a multistate settlement following allegations from regulators that said that it had withheld or delayed payments to thousands of policyholders.
The payments will be made to beneficiaries over the next 17 years, with payments worth $188 this year.
Regulators in many different states have all stated that MetLife had either withheld or delayed payments to beneficiaries across the country. According to State Controller John Chiang, California insurance beneficiaries will be seeing about $40 million from the total. It was Chiang who was responsible for an audit of several years of the operations of that insurer in his state. In the case that the beneficiaries cannot be located, the funds will be designated as unclaimed property and will be held in state coffers on their behalf.
Over 30,000 of the MetLife California insurance policies have been affected by this settlement. Each of them have an average $1,200 value. That said, the insurer will also be covering the costs accumulated by the state for locating the life insurance beneficiaries and sending them the overdue payments.
According to Chiang, this settlement will “make it clear that if the industry isn’t willing to make the payments legally required, we will take action, including lawsuits, to compel them to do right by their customers.”
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According to a hearing held jointly by Dave Jones, the California Insurance Commissioner, and Chiang, MetLife did not adequately use the Death Master File database from the Social Security Administration, which provides information regarding deceased individuals. Many other states have also since held similar life insurance hearings.
The California insurance regulators determined that despite the fact that MetLife became aware of the death of policyholders, it failed to pay the beneficiaries their due. Moreover, according to Chiang’s office, in several cases when several years had passed and the life insurance benefits were not claimed, MetLife also did not follow the legal requirement of forwarding those unclaimed funds to the office of the state controller.