Insurance and Finance Update - Written by Beasley Allen on Thursday, December 17, 2009 11:56 - 10 Comments

$50 million settlement reached in MetLife suit

MetLife has agreed to pay $50 million to settle a class action that it defrauded 8.6 million policy holders when it converted from a mutual company in 2000 to one that is publicly traded. The settlement was reached after a jury had been selected in a case, and after Judge Jack B. Weinstein, the trial judge, ruled that MetLife could introduce a 103-page decision of the New York State Superintendent of approving both the conversion itself and the disclosure documents that MetLife had mailed to its policyholders. Judge Weinstein expressed skepticism about the strength of the Plaintiffs’ case and that led to the settlement.

The settlement also resolves a state-court class action pending in Manhattan. The two class actions in New York are the last of nine lawsuits filed against MetLife charging that the conversion was tainted with fraud. The other seven lawsuits were dismissed. Judge Weinstein set a hearing on the fairness of the settlement for the 30th of this month.

If approved, class members will not receive direct payments as a result of the settlement. Instead, the amount set aside at the time of the conversion to continue generating dividends for policyholders whose policies entitled them to receive dividends will be augmented by what remains of the $50 million after payment of expenses and ’s fees. The settlement also invokes the cy pres doctrine to provide for a $2.5 million payment to a nonprofit health research organization in lieu of compensation to those policyholders who did not have a right to receive dividends.

The class in the federal claimed that MetLife violated federal securities laws by making significant omissions and misleading statements in materials sent to policyholders to win their support for the conversion. A majority of 93% approved the conversion in April 2000. Before ordering a fairness hearing, Judge Weinstein issued an opinion on the proposed settlement, finding it “probable” that the settlement will be found “fair, reasonable and adequate.”

According to the formula used in the notice to the class, the lawyers for federal Plaintiffs estimated the class would recover $8 billion if it prevailed on all claims. MetLife’s lawyers reported that the federal class would receive nothing even if it prevailed on all its claims. So there was a large range both between the two estimates and also between the amount claimed by the Plaintiffs and the settlement amount.

The lawyers for the state class estimated that its claims were worth between $400 million and $1.6 billion. Judge Weinstein wrote in his opinion that the settlement appears to have reached “an appropriate balance of the risks and benefits for all of those involved in this complex litigation.” A special master was appointed by the court to explore settlement possibilities with the parties.

Source: Law.com



10 Comments

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Dolly Alvarez
Jan 21, 2012 12:38

Where can I download claim form

charles carpenter
Mar 1, 2012 8:07

where can i download this claim form?

Rosalyn Townley
Apr 9, 2012 8:50

i would like to see if my settlment with medlife is coming soon,or# i can call.

Daisy Wells
Apr 30, 2012 14:20

I recieved a card last year concerning this , did I need to put in a claim.. I was a receipient of a federal employer that died

Tywana jackson
May 8, 2012 13:11

I reicieved a card concerning that met life did not pay my interest on the death of my father ,i would like someone to contact me on this matter at 704-430-0519 soon so that i can be updated on this information.

William Taylor
Sep 14, 2012 12:20

I received a card last year reference my medlife settlement. To date I haven’t a heard word. The card said that the matter was scheduled to be heard by the court in March this year. please have. Please (if possible) give me a phone number, address, e-mail. Thank You!

Judith A Amoruso
Oct 25, 2012 16:18

Please advise the result of the Oct.17 hearing- Is a check forthcoming?

MANY THANKS

Carl Hooker
Oct 28, 2012 8:31

Also looking for information on the results of the October 17th hearing, and process procedures.
Thank you for your time

MYRTIS BELL
Dec 25, 2012 4:04

I HAVE BEEN WAITING TO HERE ABOUT THE CLASS ACTION SETTLTMENT MY HUBAND PASSED AWAY IN 2007 AND THEY DID NOT PAY ALL THE MONEY FROM METLIFE

KENNETH L. AMBROSE
Jan 7, 2013 11:27

PLEASE LET ME KNOW IF THE SETTLEMENT IS OVER AND EHERE I CAN FILE A CLAIM
I HAVE NOT HEARD A THING SINCE I RECEIVED MY NOTICE YEARS AGO

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