MetLife 2012 Annual Report Download - page 207

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
motion for class certification of the breach of contract claim, which the court has denied. On April 28, 2011, the court denied MLIC’s motion to dismiss.
On May 4, 2012, MLIC moved for summary judgment.
Various state regulators have also taken actions with respect to retained asset accounts. The Department of Financial Services issued a circular
letter on March 29, 2012 stating that an insurer should only use a retained asset account when a policyholder or beneficiary affirmatively chooses to
receive life insurance proceeds through such an account and providing for certain disclosures to a beneficiary, including that payment by a single check
is an option. In connection with a market conduct exam, MLIC entered into a consent order with the Minnesota Department of Commerce regarding
MLIC’s use of TCAs as a default option.
The Company is unable to estimate the reasonably possible loss or range of loss arising from the TCA matters.
Other U.S. Litigation
Roberts, et al. v. Tishman Speyer Properties, et al. (Sup. Ct., N.Y. County, filed January 22, 2007)
This lawsuit was filed by a putative class of market rate tenants at Stuyvesant Town and Peter Cooper Village against parties including 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. In October 2009, the New York State Court of Appeals issued an opinion
denying MTL’s motion to dismiss the complaint. The defendants reached a settlement in principle with the plaintiff tenants, subject to finalizing the
settlement terms and court approval. On November 26, 2012, the court preliminarily approved the proposed settlement, to include payment by MTL of
$10.5 million into escrow. Notice to class members was given on January 3, 2013, and the court has scheduled a fairness hearing for April 9, 2013.
The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for
this lawsuit.
Merrill Haviland, et al. v. Metropolitan Life Insurance Company (E.D. Mich., removed to federal court on July 22, 2011)
This lawsuit was filed by 45 retired General Motors (“GM”) employees against MLIC and the amended complaint includes claims for conversion,
unjust enrichment, breach of contract, fraud, intentional infliction of emotional distress, fraudulent insurance acts, unfair trade practices, and ERISA
claims based upon GM’s 2009 reduction of the employees’ life insurance coverage under GM’s ERISA-governed plan. The complaint includes a count
seeking class action status. MLIC is the insurer of GM’s group life insurance plan and administers claims under the plan. According to the complaint,
MLIC had previously provided plaintiffs with a “written guarantee” that their life insurance benefits under the GM plan would not be reduced for the rest of
their lives. On June 26, 2012, the district court granted MLIC’s motion to dismiss the complaint. Plaintiffs have appealed that decision to the United
States Court of Appeals for the Sixth Circuit.
McGuire v. Metropolitan Life Insurance Company (E.D. Mich., filed February 22, 2012).
This lawsuit was filed by the fiduciary for the Union Carbide Employees’ Pension Plan and alleges that MLIC, which issued annuity contracts to fund
some of the benefits the Plan provides, engaged in transactions that ERISA prohibits and violated duties under ERISA and federal common law by
determining that no dividends were payable with respect to the contracts from and after 1999. On September 26, 2012, the court denied MLIC’s
motion to dismiss the complaint. The parties have begun discovery.
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.
Dolan v. Lawsky, et al. (S.D.N.Y., filed November 8, 2012)
Several plaintiffs filed this action against the New York Superintendent of Financial Services, MLIC, and other parties alleging that the defendants
breached fiduciary duties and contractual obligations and were unjustly enriched through actions they took with respect to the rehabilitation and
subsequent liquidation of Executive Life Insurance Company of New York (“ELNY”). Among other things, plaintiffs asserted that contracts entered into in
1992 between MLIC and the ELNY rehabilitator were improper. Plaintiffs sought to represent a class of beneficiaries of ELNY structured settlement
annuities who will receive reduced payments under ELNY’s court-approved liquidation plan. On February 6, 2013, the plaintiffs voluntarily dismissed this
action without prejudice.
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 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. An amended class action complaint in that case was served on Sun Life, again without
naming MLIC as a party. On August 30, 2011, Sun Life notified MLIC that a purported class action lawsuit was filed against Sun Life in Vancouver,
Alamwala v. Sun Life Assurance Co. (Sup. Ct., British Columbia, August 2011), alleging sales practices claims regarding certain of the same policies
sold by MLIC and transferred to Sun Life. Sun Life contends that MLIC is obligated to indemnify Sun Life for some or all of the claims in these lawsuits.
The Company is unable to estimate the reasonably possible loss or range of loss arising from this litigation.
MetLife, Inc. 201