MetLife 2003 Annual Report Download - page 78

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses
for sales practices claims against Metropolitan Life, New England Mutual and General American.
Regulatory authorities in a small number of states have had investigations or inquiries relating to Metropolitan Life’s, New England Mutual’s or General
American’s sales of individual life insurance policies or annuities. Over the past several years, these and a number of investigations by other regulatory
authorities were resolved for monetary payments and certain other relief. The Company may continue to resolve investigations in a similar manner.
Asbestos-Related Claims
Metropolitan Life is also a defendant in thousands of lawsuits seeking compensatory and punitive damages for personal injuries allegedly caused by
exposure to asbestos or asbestos-containing products. Metropolitan Life has never engaged in the business of manufacturing, producing, distributing or
selling asbestos or asbestos-containing products nor has Metropolitan Life issued liability or workers’ compensation insurance to companies in the
business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. Rather, these lawsuits have principally been
based upon allegations relating to certain research, publication and other activities of one or more of Metropolitan Life’s employees during the period from
the 1920’s through approximately the 1950’s and have alleged that Metropolitan Life learned or should have learned of certain health risks posed by
asbestos and, among other things, improperly publicized or failed to disclose those health risks. Metropolitan Life believes that it should not have legal
liability in such cases.
Legal theories asserted against Metropolitan Life have included negligence, intentional tort claims and conspiracy claims concerning the health risks
associated with asbestos. Although Metropolitan Life believes it has meritorious defenses to these claims, and has not suffered any adverse monetary
judgments in respect of these claims, due to the risks and expenses of litigation, almost all past cases have been resolved by settlements. Metropolitan
Life’s defenses (beyond denial of certain factual allegations) to plaintiffs’ claims include that: (i) Metropolitan Life owed no duty to the plaintiffs — it had no
special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs
cannot demonstrate justifiable detrimental reliance; and (iii) plaintiffs cannot demonstrate proximate causation. In defending asbestos cases, Metropolitan
Life selects various strategies depending upon the jurisdictions in which such cases are brought and other factors which, in Metropolitan Life’s judgment,
best protect Metropolitan Life’s interests. Strategies include seeking to settle or compromise claims, motions challenging the legal or factual basis for
such claims or defending on the merits at trial. In 2002 and 2003, trial courts in California, Utah and Georgia granted motions dismissing claims against
Metropolitan Life on some or all of the above grounds. Other courts have denied motions brought by Metropolitan Life to dismiss cases without the
necessity of trial. There can be no assurance that Metropolitan Life will receive favorable decisions on motions in the future. Metropolitan Life intends to
continue to exercise its best judgment regarding settlement or defense of such cases, including when trials of these cases are appropriate.
The following table sets forth the total number of asbestos personal injury claims pending against Metropolitan Life as of the dates indicated, the
number of new claims during the years ended on those dates and the total settlement payments made to resolve asbestos personal injury claims during
those years:
At or for the Years Ended December 31,
2003 2002 2001
(Dollars in millions)
Asbestos personal injury claims at year end (approximate) *************************** 111,700 106,500 89,000
Number of new claims during the year (approximate) ******************************* 60,300 66,000 59,500
Settlement payments during the year (1) ****************************************** $ 84.2 $ 95.1 $ 90.7
(1) Settlement payments represent payments made by Metropolitan Life during the year in connection with settlements made in that year and in prior
years. Amounts do not include Metropolitan Life’s attorneys’ fees and expenses and do not reflect amounts received from insurance carriers.
The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses
for asbestos-related claims. The ability of Metropolitan Life to estimate its ultimate asbestos exposure is subject to considerable uncertainty due to
numerous factors. The availability of data is limited and it is difficult to predict with any certainty numerous variables that can affect liability estimates,
including the number of future claims, the cost to resolve claims, the disease mix and severity of disease, the jurisdiction of claims filed, tort reform efforts
and the impact of any possible future adverse verdicts and their amounts.
Recent bankruptcies of other companies involved in asbestos litigation, as well as advertising by plaintiffs’ asbestos lawyers, may result in an
increase in the number of claims and the cost of resolving claims, as well as the number of trials and possible adverse verdicts Metropolitan Life may
experience. Plaintiffs are seeking additional funds from defendants, including Metropolitan Life, in light of such recent bankruptcies by certain other
defendants. In addition, publicity regarding legislative reform efforts may result in an increase in the number of claims.
Metropolitan Life will continue to study its claims experience, review external literature regarding asbestos claims experience in the United States and
consider numerous variables that can affect its asbestos liability exposure, including bankruptcies of other companies involved in asbestos litigation and
legislative and judicial developments, to identify trends and to assess their impact on the recorded asbestos liability.
The number of asbestos cases that may be brought or the aggregate amount of any liability that Metropolitan Life may ultimately incur is uncertain.
Accordingly, it is reasonably possible that the Company’s total exposure to asbestos claims may be greater than the liability recorded by the Company in
its consolidated financial statements and that future charges to income may be necessary. While the potential future charges could be material in
particular quarterly or annual periods in which they are recorded, based on information currently known by management, it does not believe any such
charges are likely to have a material adverse effect on the Company’s consolidated financial position.
During the fourth quarter of 2002, Metropolitan Life analyzed its claims experience and reviewed external publications and numerous variables to
identify trends and assessed their impact on its recorded asbestos liability. Certain publications suggested a trend towards more asbestos-related claims
and a greater awareness of asbestos litigation generally by potential plaintiffs and plaintiffs’ lawyers. Plaintiffs’ lawyers continue to advertise heavily with
respect to asbestos litigation. Bankruptcies and reorganizations of other defendants in asbestos litigation may increase the pressures on remaining
defendants, including Metropolitan Life. Through the first nine months of 2002, the number of new claims received by Metropolitan Life was lower than
those received during the comparable 2001 period. However, the number of new claims received by Metropolitan Life during the fourth quarter of 2002
MetLife, Inc. F-33