MetLife Announces $275M Blow to Balance Sheet

The United States’ largest life insurer is suffering up to $275 million in charges, with possibly half of the costs resulting from death master file-related lapses in coverage, and another large portion for ballooning catastrophe losses.

MetLife reported in a Form 8-K that between $115 million to $135 million in claims are due but have not yet been provided to deceased group and individual life insurance certificate holders, as well as other contracts related to the U.S. Social Security Administration’s death master file, which lists the name of every Social Security number holder who has died.

MetLife is one of several companies being investigated by 35 states across the United States for allegedly not paying beneficiaries. In June, representatives from MetLife were ordered to appear before state regulators in California and Florida to explain their policies and procedures for using the death master file.

"We are committed in our goal to pay every legitimate claim as quickly and accurately as possible," MetLife Spokesman John Calagna said, noting the range for this charge represents about 1 percent of the roughly $11 billion in benefits that MetLife pays annually.

MetLife also estimates $80 million to $100 million in catastrophe losses in its automobile and homeowners insurance business, which is $42 million to $62 million higher than its prior estimate of $38 million.

The additional costs, roughly $40 million, are related to the Executive Life Insurance Company of New York, a liquidation plan filed by the New York State Insurance Department's liquidation bureau that has been in rehabilitation since 1991. According to MetLife, “the plan will satisfy insurers' financial obligations under several state life and health insurance guaranty associations and suggests that additional industry support for some Executive Life policyholders will be provided.