MetLife is one of the largest insurance companies in the world, with roughly 90 million customers worldwide. The company offers life insurance, annuities, homeowner’s insurance, and automobile insurance.
On June 8, 2020, the insurance company reached an $84 million settlement with shareholders after 8 years of litigation.
Let’s take a look at the lawsuit and the settlement, as well as when an insured individual might sue a major insurance company like MetLife.
MetLife class-action lawsuit
On January 12, 2012, a class-action lawsuit was filed against MetLife.
The class-action lawsuit was filed on behalf of almost everyone who purchased MetLife stock during certain periods of time between 2010-2011.
In essence, the lawsuit alleged that MetLife misled shareholders by underreporting its death benefit liabilities.
What exactly does this mean?
The Social Security Administration (SSA) maintains a Death Master File, which is a record of all deaths that have been reported to the SSA.
Plaintiffs in the MetLife class-action lawsuit alleged that MetLife failed to include data from the Death Master File when calculating the amount of life insurance claims that the company would have to payout in the near future (i.e., claims that had not yet been filed but would need to be paid eventually).
The class-action lawsuit also alleged that MetLife failed to disclose active regulatory investigations into its misuse of the SSA death database.
The lawsuit alleged that as a result of MetLife's misrepresentations, people who bought MetLife stock during 2010-2011 did so at an artificially high price. Later, when all of these facts came to light, MetLife’s stock price dropped and shareholders who had bought stock suffered losses.
Metlife class action settlement
On June 8, 2020, after 8 years of litigation, MetLife agreed to settle the claims against it for $84 million. The $84 million will be distributed to eligible members of the class-action lawsuit, which include:
- Individuals who purchased MetLife common stock in the company’s August 3, 2010 offering at $42.00 per share or the company’s March 4, 2011 offering at $43.25 per share, and
- Individuals who acquired MetLife common stock between February 9, 2011, and October 6, 2011.
To receive a payment from the settlement, eligible class members were required to submit a “proof of claim” by February 26, 2021.
Notably, MetLife refused to admit any wrongdoing.
“For Defendants, the principal reason for entering into the settlement is to eliminate the uncertainty, risk, costs, and burdens inherent in any litigation, especially in complex cases such as this litigation,” settlement documents say.
When to sue an insurance company (and how)
The class-action lawsuit described above was filed by shareholders against MetLife. However, there are certain situations in which people who are insured by Metlife or any other insurance company can file a lawsuit against the insurer.
Insurance companies owe a duty to their insureds to act in good faith. This means that your insurance company is required by law to deal with you (the insured) honestly and fairly so that you can receive the benefits of the insurance contract.
Examples of actions that are considered dishonest or unfair include:
- Making an unfounded refusal to pay police proceeds (i.e., wrongfully denying a claim)
- Causing an unfounded delay in making payment
- Deceiving the insured
- Exercising any unfair advantage to pressure an insured into a settlement
If your insurance company acts dishonestly or unfairly, you may be able to file a bad faith lawsuit against your insurance company to recover damages.
Here are some steps you should take if you want to pursue an insurance bad faith claim:
- Review your insurance contract. If you believe your insurance company is doing something wrong, request a copy of your full insurance policy so that you can review it to make sure the issue your having isn't addressed in the policy.
- Maintain a record of every correspondence. Keep all correspondence between you and your insurance company in a safe place. Additionally, keep a log of each telephone call you make with the insurance company (date and time, nature of the conversation, name of the person you talked to, etc.).
- Appeal a claim. If you believe you received a wrongful denial, you can request a review. Though the chances the outcome will change are relatively small, it's possible you'll be able to avoid costly litigation by making this simple request.
- Make a demand. If your insurance company is still acting wrongfully, send your insurance company a letter (send it “certified with return receipt requested” so you have proof it was received) explaining that you plan to take legal action if the issue isn't resolved immediately.
- Hire an attorney. Use our free online directory to find an experienced insurance bad faith attorney near you and schedule an initial consultation. An attorney can settle the matter or file a lawsuit if necessary.
Bart Simson says
My mother took out a rapid cash growth, industrial, infantile endowment life insurance contract on me when I was born in 1943. The endowment matured after 20 years in 1963, but was never paid. I did not know about the contract until 2007. Now 57 years in default. I have made many attempts to collect, nothing be lies. Attempting to hide this massive liability, the company contends that the contract was paid. They have no proof of payment, except they created this forgery by photoshopping an old check, then sent me a copy claiming it was payment for the matured value on my contract. Cashed by a bank that when out of business 2 years before the check was issued. Lie after lie after lie.
Saorith Ngeth says
I have purchased life insurance from metlife since 1989 and their sell pitch during the times that I only have to pay 9 years premium but they metlife have taken my money for premium over 11 years. And after class actions lawsuit. Anthony Gian who’s metlife agent came to my house making a threat to me about my policy if I continue not to make any premium payments. And now they have changed my policy and or canceled and told me that my policies cannot be reinstated. So why? Please help me looking into this case against this insurance giant problem being dishonest with shareholders!
Margery Clapp says
I haven’t found anything in all the information about MetLife that addresses my issue. I received an annual policy statement showing my daughter, not me, as the insured. I was told 5 years ago by a financial manager to cancel that policy since my daughter is insured by her husband, and to keep only a $10,000 death benefit for myself that she can use to pay funeral expenses. The cancellation was never recorded and MetLife has no record of my being insured at all. This company messes up left and right! I’m 76 and now I find out I have no death benefit after all the years of assuming I did? And telling my daughter and my lawyer I did? Really?? We need to fix this. If we can’t I’ll file a lawsuit. MetLife’s sloppy record keeping could force my daughter to pay my funeral expenses out of her own pocket. That’s what I want to avoid and that’s why I kept my policy: for the death benefit. I’d have no problem contacting the company’s CEO, Michael Khafal directly. He’s paid a salary of more than $15 million a year including perks. He needs to earn it by fixing this horrendous screw-up.
Margaret jSummers says
What was done about their misleading of customers in their home loans when they were not a home loans company in (2000) my mother being one who got a home loan They were connected with (HUD) MY MOTHER PASSED ,(2018) SHE DEED TO ME
Pam Jones says
My mother died in October 24, 2018 and her children just found that she had Metlife stock but didn’t get a chance to be apart of the February 2021 deadline , so we want to know if there is anyway to be a part of this settlement?
Melody Adams says
My husband Robert Keith Adams has payed met life Insurance for over 34 years he passed away in February of this year our life policy was 800,000 to 1,000,000 they only paid me 200,000 I had a lawyer look into it but never heard back from him please can you help me??
From what I have read MetLife is notorious for not paying out claims regarding short term disability. Now I see what they mean just because you don’t get operated on does not mean you are not sick. Just a quick memo I had to go on short-term disability on August 15, 2021, they approved the FMLA leave but not the short term which they pay you while you are out. So, I had to appeal this claim and still dealing with it as of currently till February 15, 2022. I noticed by reading people employed by Verizon always get denied.