MetLife 2009 Annual Report Download - page 185

theories of liability. All of plaintiffs’ claims except for breach of contract claims were dismissed with prejudice on March 2, 2009. By order
dated March 20, 2009, the district court declined to retain jurisdiction over the remaining breach of contract claims and dismissed the lawsuit.
On April 17, 2009, plaintiffs filed a notice of appeal from this order.
In Re Ins. Brokerage Antitrust Litig. (D. N.J., filed February 24, 2005). In this multi-district class action proceeding, plaintiffs’ 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 and January 2008, the court issued orders granting defendants’ motions to dismiss
with prejudice the federal antitrust, the RICO, and the ERISA claims. In February 2008, the court dismissed the remaining state law claims on
jurisdictional grounds. Plaintiffs’ appeal from the orders dismissing their RICO and federal antitrust claims is pending with the U.S. Court of
Appeals for the Third Circuit. 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.
Metropolitan Life Ins. Co. v. Park Avenue Securities, et. al. (FINRA Arbitration, filed May 2006). MLIC commenced an action against Park
Avenue Securities LLC., a registered investment adviser and broker-dealer that is an indirect wholly-owned subsidiary of The Guardian Life
Insurance Company of America, alleging misappropriation of confidential and proprietary information and use of prohibited methods to solicit
the Company’s customers and recruit the Company’s financial services representatives. On February 12, 2009, a FINRA arbitration panel
awarded MLIC $21 million in damages, including punitive damages and attorneys’ fees. In March 2009, Park Avenue Securities filed a motion
to vacate the decision. In September 2009, the parties reached a settlement of this action together with related and similar matters brought by
MLIC against Park Avenue Securities and The Guardian Life Insurance Company of America.
Roberts, et al. v. Tishman Speyer Properties, et al. (Sup. Ct., N.Y. County, filed January 22, 2007). Thislawsuitwasfiledbyaputative
class of market rate tenants at Stuyvesant Town and Peter Cooper Village against parties including Metropolitan Tower Life Insurance
Company and Metropolitan Insurance and Annuity Company. These tenants claim that the Company, as former owner, and the current owner
improperly deregulated apartments while receiving J-51 tax abatements. The lawsuit seeks declaratory relief and damages for rent
overcharges. In August 2007, the trial court granted the Company’s motion to dismiss. In March 2009, New York’s intermediate appellate
court reversed the trial court’s decision and reinstated the lawsuit. The defendants appealed this ruling to the New York State Court of
Appeals, which in October 2009 issued an opinion affirming the ruling of the intermediate appellate court. The lawsuit has returned to the trial
court for further proceedings but is temporarily stayed to allow for settlement discussions between the current owner and plaintiffs. The
Company will continue to vigorously defend against the claims against it in the lawsuit.
Thomas, et al. v. Metropolitan Life Ins. Co., et al. (W.D. Okla., filed January 31, 2007). A putative class action complaint was filed against
MLIC and MSI. Plaintiffs asserted legal theories of violations of the federal securities laws and violations of state laws with respect to the sale
of certain proprietary products by the Company’s agency distribution group. Plaintiffs sought rescission, compensatory damages, interest,
punitive damages and attorneys’ fees and expenses. In August 2009, the court granted defendants’ motion for summary judgment. On
September 29, 2009, plaintiffs filed a notice of appeal from the court’s order dismissing the lawsuit.
Sales Practices Claims. Over the past several years, the Company has faced numerous claims, including class action lawsuits, alleging
improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. Some of the current cases seek
substantial damages, including punitive and treble damages and attorneys’ fees. At December 31, 2009, there were approximately 130 sales
practices litigation matters pending against the Company. The Company continues to vigorously defend against the claims in these matters.
The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable
losses for sales practices matters.
Summary
Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those
discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the
Company’s business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and
taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct
investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.
It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of
potential losses, except as noted previously in connection with specific matters. In some of the matters referred to previously, very large
and/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that
an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information
currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not
likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent
unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect
on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.
Insolvency Assessments
Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to
participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired,
insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the
basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed
F-101MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)