MetLife Inc., the largest U.S. insurer, has agreed to pay $13.5 million to resolve a federal government investigation into improper payments made to a San Diego-based insurance broker, the U.S. Justice Department said on Thursday.
It said the millions of dollars of payments it made to the insurance broker, URL, were not disclosed to MetLife’s customers or reported by MetLife as required by the Employee Retirement Income Security Act of 1974.
According to the agreement entered into by the New York-based company, MetLife adopted a program of undisclosed payments designed to induce the insurance broker and its top executive to recommend MetLife to its clients, the department said.
It said that MetLife’s sales force was also instructed to leverage the improper payments to promote MetLife products.
“This settlement relates to contingent compensation and other payments made to a particular broker more than 5 years ago,” said MetLife spokesman John Calagna. “We are pleased to put the matter behind us.”
The U.S. Attorney’s Office in San Diego said it agreed to the settlement, partly because of MetLife’s voluntary and full disclosure of the conduct, its cooperation and previous payments to its policy holders.
(Reporting by James Vicini, Editing by Gunna Dickson, Leslie Gevirtz)