MetLife 2012 Annual Report Download - page 203

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary
relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.
Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally
be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness
testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at
trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant
evidence and applicable law.
The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount
of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted below. It is possible that some of the
matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at
December 31, 2012. 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 to management, management does not believe any such charges are likely to have a material effect on the Company’s
financial position.
Matters as to Which an Estimate Can Be Made
For some of the matters disclosed below, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is
believed to be reasonably possible, but not probable, no accrual has been made. As of December 31, 2012, the Company estimates the aggregate
range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $285 million.
Matters as to Which an Estimate Cannot Be Made
For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is
often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an
assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of
factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and
annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of
reasonably possible losses or ranges of loss based on such reviews.
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:
December 31,
2012 2011 2010
(In millions, except number of claims)
Asbestos personal injury claims at year end .......................................................... 65,812 66,747 68,513
Number of new claims during the year .............................................................. 5,303 4,972 5,670
Settlement payments during the year (1) ............................................................ $ 36.4 $ 34.2 $ 34.9
(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 2009, MLIC received 3,910 new claims, ending the year with a total of 68,804 claims, and paid $37.6 million for settlements reached in 2009 and
prior years. In 2008, MLIC received 5,063 new claims, ending the year with a total of 74,027 claims, and paid $99 million for settlements reached in
2008 and prior years. In 2007, MLIC received 7,161 new claims, ending the year with a total of 79,717 claims, and paid $28.2 million for settlements
reached in 2007 and prior years. In 2006, MLIC received 7,870 new claims, ending the year with a total of 87,070 claims, and paid $35.5 million for
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