MetLife Inc., the largest group life insurer in the nation, will pay $19 million and change some of its business practices to end an investigation of payments made to brokers to steer clients its way, according to a statement by  New York Attorney General Eliot Spitzer on Friday. Spitzer has argued that contingent commissions' paid to brokers and agents are the equivalent of kickbacks that unfairly increase the prices paid by insurance clients. The settlement came as part of a multiyear investigation of bid rigging and price fixing in the insurance industry. MetLife will ban contingent commissions and disclose broker payments as part of the settlement. The company will pay $16.5 million in restitution to policyholders and penalties of $2.5 million. The company, which has more than 70 million customers worldwide, is not admitting to any liability in the settlement. Spokesman John Calagna said MetLife cooperated with Spitzer’s investigation and has already changed some of its business practices.

MetLife Pays $19 Million to Settle Spitzer Investigation (Insurance Journal 1/2/07)

Large Carrier Accepts Contingent Commission Ban (National Underwriter 1/2/07)

January 4, 2007