MetLife 2008 Annual Report Download - page 196

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 individual or groups of claims or lawsuits 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:
2008 2007 2006
December 31,
(In millions, except number of claims)
Asbestospersonalinjuryclaimsatyearend ........................... 74,027 79,717 87,070
Numberofnewclaimsduringtheyear............................... 5,063 7,161 7,870
Settlementpaymentsduringtheyear(1).............................. $ 99.0 $ 28.2 $ 35.5
(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 2005, MLIC received approximately 18,500 new claims, ending the year with a total of approximately 100,250 claims, and paid
approximately $74.3 million for settlements reached in 2005 and prior years. 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, the
aggregate amount of any liability that MLIC may incur, and the total amount paid in settlements in any given year are uncertain and may vary
significantly from year to year.
The ability of MLIC to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its
liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict with any certainty the
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 in pending and future claims, the impact of the number of new claims filed in a particular jurisdiction and variations in the
law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to
pursue claims against MLIC when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the
impact of any possible future adverse verdicts and their amounts.
The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the
future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is
reasonably possible that the Company’s total exposure to asbestos claims may be materially greater than the asbestos liability currently
accrued and that future charges to income may be necessary. While the potential future charges could be material in the particular
quarterly or annual periods in which they are recorded, based on information currently known by management, management does not
believe any such charges are likely to have a material adverse effect on the Company’s financial position.
During 1998, MLIC paid $878 million in premiums for excess insurance policies for asbestos-related claims. The excess insurance
policies for asbestos-related claims provided for recovery of losses up to $1.5 billion in excess of a $400 million self-insured retention. The
Company’s initial option to commute the excess insurance policies for asbestos-related claims would have arisen at the end of 2008. On
September 29, 2008, MLIC entered into agreements commuting the excess insurance policies as of September 30, 2008. As a result of
the commutation of the policies, MLIC received cash and securities totaling $632 million. Of this total, MLIC received $115 million in fixed
maturity securities on September 26, 2008, $200 million in cash on October 29, 2008, and $317 million in cash on January 29, 2009.
MLIC recognized a loss on commutation of the policies in the amount of $35.3 million during 2008.
F-73MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)