Chicago Business Litigation Lawyer Blog
Back in January of 2012, the City of Westland Police and Fire Retirement System filed a class-action lawsuit against MetLife Inc. They alleged that the insurance company used data from the Social Security Administration’s “Death Master File” (DMF) to determine when to stop paying annuities to deceased policyholders, but allegedly did not use the same database to determine when to pay out life insurance policies or the Retained Asset Account, although it could have easily done so.
The insurance company also allegedly failed to include data from the DMF regarding its pending payouts in its quarterly reports to its shareholders, thereby underreporting to its investors the amount of money it would have to pay out to policyholders and overestimating its quarterly profits. This withholding of information made MetLife’s investors think the company had less money in outgoing payouts than it actually had, which allegedly resulted in MetLife maintaining stock prices that were artificially high – as soon as the information was made public, the insurance company’s stock prices allegedly dropped and the plaintiffs of the lawsuit allege they suffered financial damages.
Despite the fact that regulators had looked into the insurance company’s alleged misuse (or at least misreporting) of the data contained in the DMF, MetLife also allegedly failed to disclose to its shareholders the fact that regulators were investigating the insurance company’s misuse of the DMF.
More than eight years after the first of these lawsuits were originally filed against MetLife, the insurance company has finally agreed to pay $84 million to settle the lawsuit, although it continues to insist that it has done nothing wrong. Instead, spokespersons for the company have said that they have agreed to settle the case in order to avoid any further expenses, risk, and distraction that comes with fighting a long, drawn-out legal battle against many plaintiffs. Since the lawsuit has already dragged on for the better part of a decade and is not yet showing signs of stopping, settling the lawsuit sooner, rather than later, is probably in the best interests of the insurance company.
If MetLife is guilty of the allegations laid against it in this lawsuit, it would be far from the only insurance company to have failed to include data from the DMF in its reports to its investors. Regulators, along with shareholders of other insurance companies, have pursued dozens of lawsuits against almost every large insurance company over allegations that they failed to use the DMF to make sure all their life insurance claims were paid out, despite having access to the database. Dozens of insurance companies have settled with regulators just in the time since the current lawsuit against MetLife was first filed.
As of 2018, according to a report put together by former California insurance commissioner, Dave Jones, regulators had collected a total of approximately $10 billion from insurance companies over allegations of their widespread failure to use the data in the DMF to make sure all their life insurance claims were being paid in a timely manner and to report those payouts to their investors.
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At Lubin Austermuehle, we’re all business when it comes to offering the highest level of quality service to businesses engaged in complex disputes, whether it’s shareholder oppression, breach of contract, defamation, and far more. We’re also class action attorneys who have earned a reputation for victories, including what Crain’s Chicago Business called “the largest class action settlement in Illinois.” From Wheaton and Schaumburg to the North Side, we are here for you. Call and take advantage of our FREE consultation where we can discuss your specific needs and wishes and our ability to meet them. Contact us here or call us on our locally number at 630-333-0333.