May 12, 2016

MetLife: Fined $25 Million for Negligent Variable Annuity Sales. Bet Snoopy Isn't Very Happy About That.

Do you have a MetLife variable annuity?

MetLife's MetLife Securities, Inc. subsidiary was recently fined $25 million by the securities industry regulatory authority FINRA (Financial Industry Regulatory Authority) "for making negligent material misrepresentations and omissions on variable annuity (VA) replacement applications for tens of thousands of customers" according to FINRA's news release.  $5 million of the fine is slated to be paid to MetLife variable annuity policyholders, with the remaining $20 million paid to FINRA.

Yes, $25,000,000. 
That's a lot of zeros.

The fine resulted from FINRA's investigation into MetLife' variable annuity sales practices and representations made to variable annuity policyholders.

FINRA's findings in the investigations (as laid out in the previously-mentioned news release) are, simply put, damning, including that:
"The firm's principals ultimately approved 99.79 percent of VA replacement applications submitted to them for review, even though nearly three quarters of those applications contained materially inaccurate information."
I was not involved in FINRA's investigation. However, I anticipate that MetLife will be on the receiving end of customer annuity litigation and annuity arbitration claims in the near future.

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