MetLife 2010 Annual Report Download - page 207

action lawsuit was filed against Sun Life in Toronto, Kang v. Sun Life Assurance Co. (Super. Ct., Ontario, September 2010), alleging sales
practices claims regarding the same individual policies sold by MLIC and transferred to Sun Life. Sun Life contends that MLIC is obligated to
indemnifySunLifeforsomeoralloftheclaimsinthislawsuit.MLICiscurrentlynotapartytotheKang v. Sun Life lawsuit.
Italy Fund Redemption Suspension Complaints and Litigation. As a result of suspension of withdrawals and diminution in value in certain
funds offered within certain unit-linked policies sold by the Italian branch of Alico Life International, Ltd. (“ALIL”), a number of policyholders
invested in those funds have either commenced or threatened litigation against ALIL, alleging misrepresentation, inadequate disclosures and
other related claims. These policyholders contacted ALIL beginning in July 2009 alleging that the funds operated at variance to the published
prospectus and that prospectus risk disclosures were allegedly wrong, unclear, and misleading. The limited number of lawsuits that have
been filed to date have either been resolved or are proceeding through litigation. In March 2010, ALIL learned that the public prosecutor in
Milan had opened a formal investigation into the actions of ALIL employees, as well as of employees of ALIL’s major distributor, based upon a
policyholder complaint. The complaint filed by the policyholder has now been withdrawn. ALIL is cooperating with the Italian and Irish
regulatory authorities, which have jurisdiction in connection with this matter. The Stock Purchase Agreement includes a provision pursuant to
which the Holding Company and certain related parties may seek indemnification for liabilities in excess of an agreed upon amount arising out
of certain specified policyholder claims and governmental investigations in connection with the above-mentioned unit-linked policies. See
also “Indemnification Assets and Contingent Consideration” in Note 2.
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, mortgage lending bank, 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 or provide reasonable ranges of potential losses of all pending investigations and legal
proceedings. 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
insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. In addition,
Japan has established a Policyholder Protection Commission as a contingency to protect policyholders against the insolvency of life
insurance companies in Japan through assessments to companies licensed to provide life insurance.
Assets and liabilities held for insolvency assessments were as follows:
2010 2009
December 31,
(In millions)
Other Assets:
Premiumtaxoffsetforfutureundiscountedassessments.............................. $55 $54
Premiumtaxoffsetscurrentlyavailableforpaidassessments ........................... 8 9
Receivableforreimbursementofpaidassessments(1)............................... 6 4
$69 $67
Other Liabilities:
Insolvencyassessments................................................... $94 $86
(1) The Company holds a receivable from the seller of a prior acquisition in accordance with the purchase agreement.
Assessments levied against the Company were $4 million, $2 million and $2 million for the years ended December 31, 2010, 2009 and
2008, respectively.
Argentina
The Argentine economic, regulatory and legal environment, including interpretations of laws and regulations by regulators and courts, is
uncertain. Potential legal or governmental actions related to pension reform, fiduciary responsibilities, performance guarantees and tax
rulings could adversely affect the results of the Company.
In 2007, pension reform legislation in Argentina was enacted which relieved the Company of its obligation to provide death and disability
policy coverages and resulted in the elimination of related insurance liabilities. The reform reinstituted the government’s pension plan system
and allowed for pension participants to transfer their future contributions to the government pension plan system.
F-118 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)