New York financial market regulators have imposed a monetary penalty of $60m against Metropolitan Life Insurance (MetLife) for executing insurance business without obtaining proper licenses and falsifying with regulators for its misdeeds.
In the Deferred Prosecution Agreement (DPA) and Factual Statement, MetLife accepted that the company and its subsidiaries carried out unlicensed insurance business operations and willingly misrepresented facts to the New York State Department of Insurance about the activities.
During the course of investigations, which was launched by New York State Department of Financial Services (NYSDFS) and the Manhattan District Attorney’s Office, it was found that MetLife subsidiaries ALICO and DelAm distorted their business activities to regulators.
The regulators said AIG sold the two unlicensed subsidiaries to MetLife in 2010. Prior to that in 2009, ALICO on behalf of AIG filed a document with New York State insurance regulators seeking an opinion as to whether ALICO required a license to operate in the region.
The company falsely represented in that document that ALICO did not write any insurance business from within New York, instead, it only had administrative and back office personnel working on its behalf in New York.
However, MetLife’s ALICO and other insurers collected $900m in premiums by selling and renewing insurance policies to multinational companies from 2007 to 2012.
As part of the settlement agreement, MetLife has agreed to reimburse a fine of $50m to the New York State Department of Financial Services and a $10 m fine to the Manhattan district attorney’s office.
Image: MetLife building at 200 Park Ave in New York City, the company’s corporate headquarters. Photo: courtesy of Postdlf.