MetLife’s settlement agreement history spans more than 25 years and covers deceptive life insurance sales, race-based underwriting, unclaimed death benefits, unpaid pensions, long-term care premium hikes, and employee retirement plan disputes. Together these matters have cost the company billions of dollars in payouts, fines, and restitution. MetLife has denied wrongdoing in nearly every one.
The $1.7 Billion Deceptive Sales Practices Case (1999)
The largest settlement in MetLife’s history came in August 1999, when Metropolitan Life Insurance Co. agreed to pay at least $1.7 billion to resolve a federal class action covering roughly seven million current and former policyholders who bought policies between 1982 and 1997.1Los Angeles Times. Met Life to Pay $1.7 Billion to Settle Lawsuit
Two practices drove the case. In “churning,” agents pushed customers to trade in existing policies for new ones mainly to generate commissions. In the “vanishing premiums” scheme, agents told policyholders that investment returns would eventually cover premiums entirely. When interest rates fell, policy values dropped and customers had to pay additional premiums or lose coverage.1Los Angeles Times. Met Life to Pay $1.7 Billion to Settle Lawsuit
Between 1994 and 1999, MetLife had already paid more than $135 million in fines, refunds, and penalties to state and federal regulators over the same practices before the class action was resolved. MetLife denied wrongdoing.1Los Angeles Times. Met Life to Pay $1.7 Billion to Settle Lawsuit
Race-Based Underwriting Settlement (2002)
In August 2002, MetLife entered a Regulatory Settlement Agreement with the New York State Insurance Department and other state regulators to resolve investigations and the related class action Thompson, et al. v. Metropolitan Life Insurance Company. The claims alleged that MetLife used discriminatory underwriting on life insurance policies issued between January 1, 1901, and December 31, 1972.2Justia. Regulatory Settlement Agreement, Metropolitan Life Insurance Company
Relief depended on policy status. Holders of in-force policies received enhancements such as terminal or surrender dividends, with an option to take cash instead of future benefits. Holders whose policies had already paid out received cash payments representing policy enhancements. Holders of terminated policies received both an enhanced past termination benefit and a “Settlement Death Benefit” payable on the death of the original insured or a designated alternate. MetLife did not admit wrongdoing.2Justia. Regulatory Settlement Agreement, Metropolitan Life Insurance Company
Unclaimed Death Benefits (2012)
In 2012, MetLife reached a multi-state regulatory settlement over its failure to use the Social Security Death Master File to identify deceased policyholders and pay benefits to their beneficiaries. A coordinated National Association of Insurance Commissioners investigation found MetLife had used the database to stop annuity payments to deceased recipients but had not used it to identify life insurance claims owed to beneficiaries.
The regulatory settlement required MetLife to pay $40 million to participating states for examination and monitoring costs. Going forward, MetLife had to compare its in-force insureds, annuitants, and retained asset account holders against the Death Master File each month. If no beneficiary came forward within 120 days of a death notice, the company had to conduct a “Thorough Search” using internal records, postal mailings, and online locator services, and remit unclaimed proceeds to the state as unclaimed property. Beneficiaries could not be charged fees for the searches. MetLife denied any violation of law.3Oregon Division of Financial Regulation. MetLife Regulatory Settlement Agreement
The financial exposure was far larger than the $40 million regulatory payment. Officials estimated the total could reach roughly $667 million: at least $467 million for about 708,000 industrial policyholders and at least $200 million in non-industrial life, annuity, and retained asset accounts. MetLife expected to pay $188 million of the industrial policy total in 2012, with the rest paid over 17 years.4ThinkAdvisor. MetLife’s Landmark Unclaimed Property Settlement Could Approach $700 Million
Securities Class Action Over Death Master File Disclosures ($84 Million)
The unclaimed benefits scandal produced a shareholder case as well. In City of Westland Police & Fire Retirement System v. MetLife, Inc., filed in 2012 in the Southern District of New York, shareholders alleged MetLife misled investors by underreporting death benefit liabilities and failing to disclose regulatory investigations into its Death Master File use.5Bloomberg Law. MetLife’s $84 Million Death Database Settlement Filed With Judge
MetLife agreed to an $84 million settlement in June 2020, giving shareholders who bought stock in the August 2010 and March 2011 offerings, or purchased common stock between February 9, 2011, and October 6, 2011, roughly 32% of estimated recoverable damages. A motion for final approval was filed in February 2021. MetLife did not admit wrongdoing.5Bloomberg Law. MetLife’s $84 Million Death Database Settlement Filed With Judge6Enjuris. MetLife Class Action Lawsuit
Pension Payment Failures (2018–2019)
In 2017, MetLife disclosed it could not locate thousands of retirees entitled to pension benefits under group annuity contracts the company had acquired. State and federal regulators found systemic failures in how MetLife tracked and paid those obligations.
New York Department of Financial Services
On January 28, 2019, the New York Department of Financial Services announced a consent order requiring MetLife to pay a $19.75 million fine and return more than $189 million to affected individuals. At the time of the announcement, $123 million of that restitution had already been paid. Investigators found MetLife had improperly released reserves for 13,712 group annuity certificates, driving a $500 million reserve increase. The company had failed to cross-check records against the Death Master File when Social Security numbers were missing and had failed to locate certificate holders or reach out to beneficiaries.7New York Department of Financial Services. DFS Fines MetLife Insurance Company of Connecticut $19.75 Million
SEC and Massachusetts
In December 2019, MetLife agreed to pay $10 million to settle with the SEC, which found the company had violated federal securities laws by improperly releasing reserves. The SEC determined MetLife had presumed annuitants were dead or unfindable after only two mailing attempts over 25 years, and that data errors led to overstated reserves and understated income. MetLife neither admitted nor denied the findings.8Reuters. MetLife Inc to Pay $10 Million to Settle With SEC After Failure to Pay Pensions
Massachusetts had acted a year earlier, fining MetLife $1 million in December 2018 and ordering the company to make payments to retirees after charging it with fraud in connection with the pension failures.8Reuters. MetLife Inc to Pay $10 Million to Settle With SEC After Failure to Pay Pensions
Long-Term Care “Reduced-Pay at 65” Settlement
In Newman v. Metropolitan Life Insurance Co., long-term care policyholders alleged MetLife raised premiums after they turned 65, violating the terms of a “Reduced-Pay at 65” rider that entitled them to a 50% reduction at that age in exchange for higher payments earlier. One lead plaintiff reported a 102% premium increase three years after turning 65.9Top Class Actions. Increased Premiums MetLife Long-Term Care Benefits Shock Customers
Judge Thomas M. Durkin of the U.S. District Court for the Northern District of Illinois granted final approval on February 20, 2020. The settlement covered 4,362 policyholders and required MetLife to cap premiums at 50% of the pre-age-65 amount for every class member, waiving further increases. MetLife also had to refund 30% of all post-age-65 premium increases it had collected, with additional refunds for class members who had cut policy benefits to avoid the hikes.10GS Legal. MetLife Long-Term Care Reduced Pay at 65
ERISA Retirement Plan Settlements
401(k) Plan ($4.5 Million)
In Kohari et al. v. MetLife Group Inc. et al., filed in 2021 in the Southern District of New York, MetLife employees alleged the company breached its ERISA fiduciary duties by filling its 401(k) plan with affiliated, underperforming index funds instead of stronger options from competitors.11Bloomberg Law. MetLife’s $4.5 Million Deal Over In-House 401(k) Funds Gets Nod12InvestmentNews. MetLife to Pay $4.5M Settlement
The $4.5 million settlement covers more than 48,000 people who invested in MetLife index funds through the company’s 401(k) plan between July 2015 and December 2021. Eligible participants are expected to receive between 19% and 27% of their estimated losses on a pro rata basis. The court granted final approval and awarded $1.5 million to plaintiffs’ counsel. After the suit was filed, MetLife also reduced plan fees by moving index funds from group annuity contracts to collective investment trusts.13Bloomberg Law. MetLife Finalizes $4.5 Million In-House 401(k) Fund Settlement
Pension Mortality Tables ($23 Million)
In Masten et al. v. Metropolitan Life Insurance Co., filed in December 2018 in the Southern District of New York, retirees alleged MetLife’s pension plan used mortality tables from the 1970s and 1980s to calculate benefits, leaving payments that were not actuarially equivalent across benefit options as ERISA requires. After nearly eight years of litigation, including a denied motion to dismiss and class certification, the parties reached a $23 million agreement in principle just before a trial scheduled for February 2026.14Plan Sponsor. MetLife Settles Mortality Table ERISA Lawsuit for $23M
The proposed settlement covers more than 6,000 married retirees who began receiving benefits or became eligible starting in 2013, excluding those who took lump-sum distributions. Rather than a one-time payment, the deal requires MetLife to permanently increase the monthly benefits of class members, with some expected to receive about 32% of their estimated losses. Final court approval was pending as of early 2026.15Bloomberg Tax. MetLife Strikes Class Deal Worth $23 Million Over Pension Math
Other Recent Matters
In Margaret Vega v. Metropolitan Direct Property and Casualty Insurance Co., a New Mexico class action alleged MetLife misrepresented or failed to disclose underinsured motorist coverage limitations and applied improper offsets to claims between October 2010 and January 2022. The $1.2 million settlement pays offset subclass members up to $25,000 and gives premium refund subclass members partial refunds. A final approval hearing was set for July 1, 2026.16ClaimDepot. Metropolitan UIM Settlement
Not every ERISA case against MetLife has ended in a payout. In Knudsen v. MetLife Group Inc., former employees alleged the company diverted $65 million in prescription drug plan rebates to itself between 2016 and 2021. The Third Circuit affirmed dismissal in September 2024, holding the plaintiffs lacked standing because the plan documents expressly stated rebates would be applied to plan expenses rather than used to reduce individual copayments.17NFP. Third Circuit Upholds ERISA Claims Dismissal on Drug Rebates