MetLife 2007 Annual Report Download - page 151

Demutualization Actions
Several lawsuits were brought in 2000 challenging the fairness of the Plan and the adequacy and accuracy of MLIC’s disclosure to
policyholders regarding the Plan. The actions discussed below name as defendants some or all of MLIC, the Holding Company, and
individual directors. MLIC, the Holding Company, and the individual directors believe they have meritorious defenses to the plaintiffs’ claims
and are contesting vigorously all of the plaintiffs’ claims in these actions.
Fiala, et al. v. Metropolitan Life Ins. Co., et al. (Sup. Ct., N.Y. County, filed March 17, 2000). The plaintiffs in the consolidated state
court class actions seek compensatory relief and punitive damages against MLIC, the Holding Company, and individual directors. On
January 30, 2007, the trial court signed an order certifying a litigation class of present and former policyholders on plaintiffs’ claim that
defendants violated section 7312 of the New York Insurance Law, but denying plaintiffs’ motion to certify a litigation class with respect to a
common law fraud claim. Plaintiffs and defendants have filed notices of appeal from this order. The court has directed various forms of
class notice.
In re MetLife Demutualization Litig. (E.D.N.Y., filed April 18, 2000). In this class action against MLIC and the Holding Company,
plaintiffs served a second consolidated amended complaint in 2004. Plaintiffs assert violations of the Securities Act and the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), in connection with the Plan, claiming that the Policyholder Information Booklets
failed to disclose certain material facts and contained certain material misstatements. They seek rescission and compensatory damages.
By orders dated July 19, 2005 and August 29, 2006, the federal trial court certified a litigation class of present and former policyholders.
The court has not yet directed the manner and form of class notice.
Asbestos-Related Claims
MLIC is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege
that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. MLIC
has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has
MLIC issued liability or workers’ compensation insurance to companies in the business of manufacturing, producing, distributing or selling
asbestos or asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research,
publication and other activities of one or more of MLIC’s employees during the period from the 1920’s through approximately the
1950’s and allege that MLIC 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. MLIC believes that it should not have legal liability in these cases. The outcome of most
asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in
various jurisdictions, the nature of the alleged injury, and factors unrelated to the ultimate legal merit of the claims asserted against MLIC.
MLIC employs a number of resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by
judicial rulings and settling litigation under appropriate circumstances.
Claims asserted against MLIC have included negligence, intentional tort and conspiracy concerning the health risks associated with
asbestos. MLIC’s defenses (beyond denial of certain factual allegations) include that: (i) MLIC 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 did not rely on any actions of MLIC; (iii) MLIC’s conduct was not the cause of the plaintiffs’ injuries; (iv) plaintiffs’
exposure occurred after the dangers of asbestos were known; and (v) the applicable time with respect to filing suit has expired. During the
course of the litigation, certain trial courts have granted motions dismissing claims against MLIC, while other trial courts have denied MLIC’s
motions to dismiss. There can be no assurance that MLIC will receive favorable decisions on motions in the future. While most cases
brought to date have settled, MLIC intends to continue to defend aggressively against claims based on asbestos exposure, including
defending claims at trials.
The approximate total number of asbestos personal injury claims pending against MLIC as of the dates indicated, the approximate
number of new claims during the years ended on those dates and the approximate total settlement payments made to resolve asbestos
personal injury claims at or during those years are set forth in the following table:
2007 2006 2005
December 31,
(In millions, except number of claims)
Asbestos personal injury claims at year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,717 87,070 100,250
Numberofnewclaimsduringtheyear ............................... 7,161 7,870 18,500
Settlementpaymentsduringtheyear(1).............................. $ 28.2 $ 35.5 $ 74.3
(1) Settlement payments represent payments made by MLIC during the year in connection with settlements made in that year and in prior
years. Amounts do not include MLIC’s attorneys’ fees and expenses and do not reflect amounts received from insurance carriers.
In 2004, MLIC received approximately 23,900 new claims, ending the year with a total of approximately 108,000 claims, and paid
approximately $85.5 million for settlements reached in 2004 and prior years. In 2003, MLIC received approximately 58,750 new claims,
ending the year with a total of approximately 111,700 claims, and paid approximately $84.2 million for settlements reached in 2003 and
prior years. The number of asbestos cases that may be brought or the aggregate amount of any liability that MLIC may ultimately incur is
uncertain.
The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably
estimable losses for asbestos-related claims. MLIC’s recorded asbestos liability is based on its estimation of the following elements, as
informed by the facts presently known to it, its understanding of current law, and its past experiences: (i) the reasonably probable and
estimable liability for asbestos claims already asserted against MLIC, including claims settled but not yet paid; (ii) the reasonably probable
and estimable liability for asbestos claims not yet asserted against MLIC, but which MLIC believes are reasonably probable of assertion;
F-55MetLife, Inc.
MetLife, Inc.
Notes to Consolidated Financial Statements — (Continued)