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Metlife Will Pay a “Significant Fine” to FINRA Over Variable Annuity Sales
By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Tuesday, November 24, 2015.
Erwin J. Shustak
Managing Partner
Location: San Diego, California
New York, New York
Phone: (619) 696-9500 (Ext. 109)
(800) 496-5900 (Ext. 109)
Email: [email protected]
MetLife, Inc., the largest U.S. life insurer, has disclosed that FINRA has indicated it will seek a “significant fine” from MetLife as part of FINRA’s investigation of MetLife’s possible violations in the sale of variable annuities. According to MetLife, it is cooperating in the investigation.
The investigation focuses on potential violations “regarding alleged misrepresentations, suitability, and supervision in connection with sales and replacements, [known as “flipping”], of existing variable annuities and certain riders on such annuities”.
While MetLife’s spokesman said, in the same filing, that “we strongly disagree with the conclusions reached by FINRA, and we will defend ourselves vigorously”, the insurer estimated that its reasonable possible legal costs in excess of reserves was as much as $425 million. Mmmmhhhh. “Strongly disagree” but spending almost a half billion dollars to defend the allegations?
Sales of annuities is one of the most potentially abusive sales practices amongst insurance and brokerage firms. Commissions on the sale of annuities can be as much as 10%, giving unscrupulous brokers and insurance salepeople a very high incentive to sell as many annuities as possible.
Shustak Reynolds & Partners, P.C. has extensive expertise and experience in the areas of securities, financial services and business law and handles many cases for brokers, brokerage firms, investment advisers and investors. For more information contact Erwin J. Shustak, Esq, Managing Partner, at 619.696.9500 or via email at [email protected]
