Met Life Under Scrutiny in Florida
Florida state regulators on Thursday said they are investigating whether Metropolitan Life Insurance Co. misled thousands of customers--many of them elderly--into buying more expensive policies.
Two of the nation’s largest life insurance companies have already settled with Florida this year after similar investigations into their sales methods.
John Hancock Mutual Life Insurance Co., based in Boston, agreed last week to pay the state $6 million and to compensate up to 153,000 customers who bought policies since 1979.
Prudential Life Insurance Co. of America, the nation’s largest life insurer, agreed to pay Florida a $15-million fine last spring to settle accusations its agents deceived 128,000 customers into buying expensive policies.
In a practice known as “churning,” customers are urged to buy additional life insurance and pay for it by using the cash value in an existing policy. The customers, often elderly, are later hit with large, unexpected premium bills.
Florida’s probe of Met Life has been underway for seven months and involves up to 30 other insurers, said Don Pride, spokesman for Florida Insurance Commissioner Bill Nelson.
“We really do not know the scope of the problem in Florida at this point,” Pride said. “We do know it’s a widespread problem in the industry.”
When he announced the settlement with John Hancock last week, Nelson said anywhere from 16 to 30 insurers--”a good part” of the life insurance industry in Florida--are under investigation.
Pride said Met Life, based in New York, has cooperated fully with investigators.
Met Life Vice President Larry Vranka said Thursday that the company cannot “guarantee that 100% of the cases are handled perfectly, but we believe that once the investigation has been concluded there will be no findings of any major wrongdoing.”
Met Life, the nation’s second-largest life insurer, has about 5% of the life insurance market in Florida. Many of the policies were sold to elderly residents.
“The insurance industry as a whole is very highly regulated and it is not uncommon that departments do examinations or investigations,” Vranka said. “Our position is that when it is completed that the findings will not be ones that disclose any major problems.”
