MetLife says it will stop taking new individual disability insurance policies on Sept. 1.
That will be the final date to submit signed applications, and Oct. 31 will be the final date to place business, according to Kieran Mullins, a senior vice president in the company’s client solutions unit.
Mullins said last week in a memo marked “for producers only,” that MetLife (NYSE: MET) is getting out of individual disability sales because it has to focus on separating its U.S. retail organization from the rest of the company.
“While there is tremendous opportunity in this market, the suspension provides us with the time and resources needed to properly separate the U.S. retail business from MetLife,” Mullins said in the memo. “There is a significant amount of work to be done to retool existing systems and implement new systems.”
The MetLife group, voluntary and worksite benefits business will continue to manufacture and sell group disability insurance and guaranteed standard issue products, Mullins said.
Several disability insurance distributors posted copies of the memo on public websites.
The company confirmed today in an email that it is suspending individual disability sales on Sept. 1 and continuing sales of group, voluntary and worksite disability products.
“This announcement has no impact on existing MetLife customers with [individual disability insurance] policies, which will remain in force,” the company said.
In a set of answers to questions about the deal, MetLife said it will continue to support all in-force policy administration and transactions for individual disability policies, and that it will continue to support any guaranteed or automatic benefits increase provisions.
MetLife will pay the usual first-year commissions and applicable bonuses on policies placed before Oct. 31, and it will continue to meet the terms of renewal commission arrangements, the company said.
MetLife has been involved in insuring workers against the risk of disability for more than a century, but it was a relatively minor player in the individual disability market in the 1980s and early 1990s. At that time, some other issuers found they had underestimated how risky insuring doctors and lawyers could be as conditions in the medical and legal fields changed, according to remarks Gordon G. Dinsmore Jr., a MetLife vice president, made during a Society of Actuaries (SOA) meeting in San Francisco in 1999.