MetLife 2007 Annual Report Download - page 153

plaintiff alleges breach of contract and negligent misrepresentations relating to, among other things, life insurance premium payments and
seeks damages, including punitive damages.
Regulatory authorities in a small number of states have had investigations or inquiries relating to MLIC’s, New England’s, GALIC’s, MSI’s
or Walnut Street Securities’ sales of individual life insurance policies or annuities or other products. 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. 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 MLIC, New England, GALIC, MSI
and Walnut Street Securities.
Property and Casualty Actions
Katrina-Related Litigation. There are a number of lawsuits, including a few putative class actions and “mass” actions, pending in
Louisiana and Mississippi against Metropolitan Property and Casualty Insurance Company relating to Hurricane Katrina. The lawsuits
include claims by policyholders for coverage for damages stemming from Hurricane Katrina, including for damages resulting from flooding
or storm surge. The deadline for filing actions in Louisiana has expired. It is reasonably possible that additional actions will be filed in other
states. The Company intends to continue to defend vigorously against these matters, although appropriate matters may be resolved as part
of the ordinary claims adjustment process.
Shipley v. St. Paul Fire and Marine Ins. Co. and Metropolitan Property and Casualty Ins. Co. (Ill. Cir. Ct., Madison County, filed February
26 and July 2, 2003). Two putative nationwide class actions have been filed against Metropolitan Property and Casualty Insurance
Company in Illinois. One suit claims breach of contract and fraud due to the alleged underpayment of medical claims arising from the use of
a purportedly biased provider fee pricing system. A motion for class certification has been filed and briefed. The second suit currently
alleges breach of contract arising from the alleged use of preferred provider organizations to reduce medical provider fees covered by the
medical claims portion of the insurance policy. A motion for class certification has been filed and briefed. A third putative nationwide class
action relating to the payment of medical providers, Innovative Physical Therapy, Inc. v. MetLife Auto & Home, et ano (D. N.J., filed
November 12, 2007) has been filed against Metropolitan Property and Casualty Insurance Company in federal court in New Jersey. The
Company is vigorously defending against the claims in these matters.
Regulatory Matters
The Company receives and responds to subpoenas or other inquiries from state regulators, including state insurance commissioners;
state attorneys general or other state governmental authorities; federal regulators, including the SEC; federal governmental authorities,
including congressional committees; and the Financial Industry Regulatory Authority seeking a broad range of information. The issues
involved in information requests and regulatory matters vary widely. Certain regulators have requested information and documents
regarding contingent commission payments to brokers, the Company’s awareness of any “sham” bids for business, bids and quotes that
the Company submitted to potential customers, incentive agreements entered into with brokers, or compensation paid to intermediaries.
Regulators also have requested information relating to market timing and late trading of mutual funds and variable insurance products and,
generally, the marketing of products. The Company has received a subpoena from the Office of the U.S. Attorney for the Southern District
of California asking for documents regarding the insurance broker Universal Life Resources. The Company has been cooperating fully with
these inquiries.
In 2005, MSI received a notice from the Illinois Department of Securities asserting possible violations of the Illinois Securities Act in
connection with sales of a former affiliate’s mutual funds. A response has been submitted and in January 2008, MSI received notice of the
commencement of an administrative action by the Illinois Department of Securities. MSI intends to vigorously defend against the claims in
this matter.
Other Litigation
In Re Ins. Brokerage Antitrust Litig. (D. N.J., filed February 24, 2005). In this multi-district proceeding, plaintiffs filed a class action
complaint consolidating claims from several separate actions that had been filed in or transferred to the District of New Jersey in 2004 and
2005. The consolidated complaint alleged that the Holding Company, MLIC, several non-affiliated insurance companies and several
insurance brokers violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Employee Retirement Income Security Act
of 1974 (“ERISA”), and antitrust laws and committed other misconduct in the context of providing insurance to employee benefit plans and
to persons who participate in such employee benefit plans. In August and September 2007, the court issued orders granting defendants’
motions to dismiss with prejudice the federal antitrust and the RICO claims. In January 2008, the court issued an order granting
defendants’ summary judgment motion on the ERISA claims, and in February 2008, the court dismissed the remaining state law claims on
jurisdictional grounds. Plaintiffs have filed a notice of appeal of the court’s decisions. A putative class action alleging that the Holding
Company and other non-affiliated defendants violated state laws was transferred to the District of New Jersey but was not consolidated
with other related actions. Plaintiffs’ motion to remand this action to state court in Florida is pending.
The American Dental Association, et al. v. MetLife Inc., et al. (S.D. Fla., filed May 19, 2003). The American Dental Association and
three individual providers have sued the Holding Company, MLIC and other non-affiliated insurance companies in a putative class action
lawsuit. The plaintiffs purport to represent a nationwide class of in-network providers who allege that their claims are being wrongfully
reduced by downcoding, bundling, and the improper use and programming of software. The complaint alleges federal racketeering and
various state law theories of liability. The district court has granted in part and denied in part the Company’s motion to dismiss. The plaintiffs
filed an amended complaint, and the Company filed another motion to dismiss. The court has issued a tag-along order, related to a medical
managed care trial, which has stayed the lawsuit.
F-57MetLife, Inc.
MetLife, Inc.
Notes to Consolidated Financial Statements — (Continued)