Metlife Inc (NYSE:MET) agreed to pay a penalty of $50 million to settle the investigation of the New York Department of Financial Services regarding allegations that its international insurance unit is doing business with multinational companies without a proper license in the state, according to report from the Wall Street Journal.
The insurance company also agreed to pay an additional $10 million to prevent a potential litigation by the New York Country District Attorney. Metlife Inc (NYSE:MET) signed a deferred prosecution agreement, a deal commonly used by authorities over the past ten years.
Agreement allows Metlife unit to do business in New York
Metlife Inc (NYSE:MET) stated that its agreement with the regulator clarifies that its international business unit is allowed to continue doing business with its multinational clients in the state.
The agreement “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 and partners,” according to the insurance company in a statement.
Regulator continues AIG investigation
The New York Department of Financial Services is continuing its investigation against American International Group Inc (NYSE:AIG) regarding the sale of its international unit to Metlife Inc (NYSE:MET) in 2010. The regulator said that it discovered that the international unit “made intentional misrepresentation and omissions” to insurance regulations regarding its sales activities in New York in 2009.
The two subsidiaries involved in the investigation were American Life Insurance Co., which sells insurance to companies with employees outside the United States; and the Delaware American Life Insurance Co., which sell insurance to employees of U.S. companies who are working in other countries.
Jon Diat, spokesperson from American International Group Inc (NYSE:AIG) said the insurance giant “disagrees that the conduct in question violated the law.” He emphasized that a New York license is only required where a foreign insurer issues policies covering New Yorkers based on plain language of relevant statute and decaded of industry practice.
“Moreover, there is no allegation, and we are aware of no evidence, that anyone has been harmed by the conduct at issue,” said Diat.