MetLife Inc. (MET:US), the largest U.S. life insurer, will pay $60 million after New York watchdogs found subsidiaries solicited business in the state without a license and made intentional misrepresentations to regulators.
MetLife also agreed to cooperate with the Department of Financial Services investigation into American International Group Inc. (AIG:US), which sold the businesses to MetLife in 2010, DFS said in a statement today. That inquiry hasn’t been resolved, the department said.
“Insurers have a responsibility to follow the law, play by the rules, and be honest with their regulators,” DFS Superintendent Benjamin Lawsky said in the statement.
MetLife will pay $50 million to DFS and $10 million to the Manhattan District Attorney’s Office. The New York-based insurer also agreed to a deferred prosecution agreement with the office, according to a separate statement.
AIG sold American Life Insurance Co. to MetLife in 2010 for more than $16 billion as part of an effort to simplify operations and help repay a U.S. bailout.
AIG said in a statement that it didn’t violate the law.
“Decades of industry practice and the plain language of the relevant statute make clear that a New York license is required only where a foreign insurer issues policies covering New Yorkers,” Jon Diat, an AIG spokesman, said in a statement. “There is no allegation, and we are aware of no evidence, that anyone has been harmed by the conduct at issue.”
Alico has operations in Asia and Europe and used personnel in New York to solicit business from companies that bought protection for employees overseas, according to District Attorney Cyrus R. Vance Jr.
In 2009, Alico misled regulators when it filed a document seeking an opinion as to whether it required a New York license, Vance’s office said in its statement.
“It was falsely represented in that document that Alico conducted no business from within New York, but rather only had administrative and back-office personnel acting on its behalf in New York,” according to the statement.
MetLife seeks a constructive relationship with regulators, John Calagna, a spokesman for the company, said in a statement.
“The agreement with DFS makes clear that our Global Employee Benefits business can continue to have meetings and discussions in New York with our multinational clients and prospects about the capabilities of MetLife’s non-U.S. affiliates (MET:US) and partners,” Calagna said in an e-mail.
AIG gained 0.3 percent to $50.01 at 4:15 p.m. in New York. MetLife advanced 0.5 percent to $52.80.
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