MetLife 2010 Annual Report Download - page 206

materially affected. Management believes that any allegations that information about the TCA is not adequately disclosed or that the accounts
are fraudulent or otherwise violate state or federal laws are without merit.
MLIC is a defendant in lawsuits related to the TCA. The lawsuits include claims of breach of contract, breach of a common law fiduciary
duty or a quasi-fiduciary duty such as a confidential or special relationship, or breach of a fiduciary duty under the Employee Retirement
Income Security Act of 1974 (“ERISA”).
Clark, et al. v. Metropolitan Life Insurance Company (D. Nev., filed March 28, 2008). This putative class action lawsuit alleges breach of
contract and breach of a common law fiduciary and/or quasi-fiduciary duty arising from use of the TCA to pay life insurance policy death
benefits. As damages, plaintiffs seek disgorgement of the difference between the interest paid to the account holders and the investment
earnings on the assets backing the accounts. In March 2009, the court granted in part and denied in part MLIC’s motion to dismiss,
dismissing the fiduciary duty and unjust enrichment claims but allowing a breach of contract claim and a special or confidential relationship
claim to go forward. On September 9, 2010, the court granted MLIC’s motion for summary judgment. On September 20, 2010, plaintiff filed a
Notice of Appeal to the United States Court of Appeals for the Ninth Circuit.
Faber, et al. v. Metropolitan Life Insurance Company (S.D.N.Y., filed December 4, 2008). This putative class action lawsuit alleges that
MLIC’s use of the TCA as the settlement option under group life insurance policies violates MLIC’s fiduciary duties under ERISA. As damages,
plaintiffs seek disgorgement of the difference between the interest paid to the account holders and the investment earnings on the assets
backing the accounts. On October 23, 2009, the court granted MLIC’s motion to dismiss with prejudice. On November 24, 2009, plaintiffs
filed a Notice of Appeal to the United States Court of Appeals for the Second Circuit.
Keife, et al. v. Metropolitan Life Insurance Company (D. Nev., filed in state court on July 30, 2010 and removed to federal court on
September 7, 2010). This putative class action lawsuit raises a breach of contract claim arising from MLIC’s use of the TCA to pay life
insurance benefits under the Federal Employees’ Group Life Insurance program. As damages, plaintiffs seek disgorgement of the difference
between the interest paid to the account holders and the investment earnings on the assets backing the accounts. In September 2010,
plaintiffs filed a motion for class certification of the breach of contract claim, which the court has stayed. On November 22, 2010, MLIC filed a
motion to dismiss.
Other U.S. Litigation
Travelers Ins. Co., et al. v. Banc of America Securities LLC (S.D.N.Y., filed December 13, 2001). On January 6, 2009, after a jury trial,the
district court entered a judgment in favor of The Travelers Insurance Company, now known as MICC, in the amount of approximately
$42 million in connection with securities and common law claims against the defendant. On May 14, 2009, the district court issued an opinion
and order denying the defendant’s post judgment motion seeking a judgment in its favor or, in the alternative, a new trial. On July 20, 2010, the
United States Court of Appeals for the Second Circuit issued an order affirming the district court’s judgment in favor of MICC and the district
court’s order denying defendant’s post-trial motions. On October 14, 2010, the Second Circuit issued an order denying defendant’s petition
for rehearing of its appeal. On October 20, 2010, the defendant paid MICC approximately $42 million, which represents the judgment amount
due to MICC. This lawsuit is now fully resolved.
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 (“MTL”) and Metropolitan Insurance and Annuity Company. Metropolitan Insurance and Annuity Company has merged into MTL and
no longer exists as a separate entity. These tenants claim that MTL, 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. Although the
tenants allege over $200 million in damages in the complaint, MTL strongly disputes the tenants’ damages amounts. In October 2009, the
New York State Court of Appeals issued an opinion denying MTL’s motion to dismiss the complaint. The lawsuit has returned to the trial court
where MTL continues to vigorously defend against the claims. The Company believes adequate provision has been made in its consolidated
financial statements for all probable and reasonably estimable losses for this lawsuit. It is reasonably possible that the Company’s total
exposure may be greater than the liability currently accrued and that future charges to income may be necessary. Management believes that
the Company’s financial statements as a whole will not be materially affected by any such future charges.
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 district court granted defendants’ motion for summary judgment.
On February 2, 2011, the United States Court of Appeals for the Tenth Circuit affirmed the judgment of the district court granting MLIC’s and
MSI’s summary judgment motion.
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. 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.
International Litigation
Sun Life Assurance Company of Canada v. Metropolitan Life Ins. Co. (Super. Ct., Ontario, October 2006). In 2006, Sun Life Assurance
Company of Canada (“Sun Life”), as successor to the purchaser of MLIC’s Canadian operations, filed this lawsuit in Toronto, seeking a
declaration that MLIC remains liable for “market conduct claims” related to certain individual life insurance policies sold by MLIC and that have
been transferred to Sun Life. Sun Life had asked that the court require MLIC to indemnify Sun Life for these claims pursuant to indemnity
provisions in the sale agreement for the sale of MLIC’s Canadian operations entered into in June of 1998. In January 2010, the court found
that Sun Life had given timely notice of its claim for indemnification but, because it found that Sun Life had not yet incurred an indemnifiable
loss, granted MLIC’s motion for summary judgment. Both parties appealed. In September 2010, Sun Life notified MLIC that a purported class
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MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)