Florida Insurance Commissioner Bill Nelson and Attorney General Bob Butterworth ordered Metropolitan Life to pay the state $7.5 million to settle allegations that some of its agents used deceptive sales tactics since the early 1980s to persuade thousands of Floridians to buy more life insurance.
The settlement, the second largest with an insurer in state history, ends an investigation of MetLife launched in May 1997. The investigation is part of a broader probe into insurance-industry practices such as “churning,” in which the sales of additional policies are financed by draining the cash value of existing ones without policyholders’ knowledge.
The ongoing investigations already had netted similar penalties totaling $26.5 million against Prudential, John Hancock, and American General. Much of that money has been channeled into college scholarships aimed at promoting high standards of business ethics. Nelson is seeking a budget amendment to earmark most of the additional $7.5 million from MetLife to make more scholarships available at Florida’s universities, community colleges and private colleges.
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