Metropolitan Life Insurance Company (“MetLife”) agrees to pay $13.5 million to the federal government to avoid prosecution of allegations that it violated the Employee Retirement Income Security Act, according to a Department of Justice Press Release by the San Diego Division of the Federal Bureau of Investigation. As alleged, MetLife made improper payments to a San Diego based insurance broker, by knowingly failing to disclose and report certain information, including commissions and fees paid, required under ERISA. The U.S. Attorney for the Southern District of California, Karen P. Hewitt, stated, “Insurance commission and fee disclosures are designed to promote and ensure transparency. Any effort by an insurance company to conceal payment of improper fees or commissions will not be tolerated.”
According to the Non-Prosecution Agreement entered into by MetLife, it made payments to the brokerage firm in order to obtain additional business. The settlement was reached, in part, as a result of the insurer’s voluntary disclosure of the underlying conduct, cooperation with federal authorities, continuing remedial efforts, including implementing internal controls and payments to its policyholders.
For a complete copy of the Department of Justice Press Release, click here.
Kim Whistler and Dan Gerber