NU Online News Service, Feb. 7, 2:34 p.m. – MetLife, Inc., New York, announced that it will take a $250 million pre-tax charge for the fourth quarter 2001.
The charge is being recorded to cover costs associated with the anticipated resolution of class-action lawsuits and a regulatory inquiry pending against Metropolitan Life Insurance Company, involving alleged race-based insurance underwriting practices before 1973.
This is an “accounting announcement,” says MetLife spokesman Kevin Foley. Met Life cannot characterize the progress on settlement talks for either an investigation by the New York insurance department or a class action suit against the company, he adds.
A spokesperson for the New York insurance department declined to comment an investigation of Met Life’s practices that has been ongoing for over a year.
However, Texas Commissioner Jose Montemayor, who chairs a working group of the National Association of Insurance Commissioners, Kansas City, Mo., addressing the race based-issue, says that progress is being made on several race-based investigations. Among the investigations whose settlements are imminent, according to Montemayor, are examinations of Unitrin, Inc., Chicago and ING Life Insurance Company of Georgia, Atlanta.
Montemayor says that government officials including a U.S. senator and the Texas governor’s office have indicated that the race-based issue is important and is being watched.
The NAIC working group is coordinating examinations nationwide. As previously reported (see NU, Jan. 7), of the 93 companies examined, 22 companies have had an initial review, 29 have examinations planned or scheduled by one state or a group of states, and 17 have resolved any questions without a financial examination. Thirteen companies have examinations in progress, nine companies’ exams have been completed but not finalized, two companies’ exams have been finalized and one company has a regulatory hearing pending.
The two companies with finalized exams are American General Life Insurance Company, Houston, and Philadelphia United Life Insurance Company, Bala Cynwyd, Pa.