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PIA National Sends Letter to MetLife CEO Over Pilot Program With GM

PIA National President Fred Thomas, together with the presidents of PIA of Washington and Oregon sent a letter on July 12 to Steven A. Kandarian,...
July 19, 2011

PIA National President Fred Thomas, together with the presidents of PIA of Washington and Oregon sent a letter on July 12 to Steven A. Kandarian, President and Chief Executive Officer of MetLife, Inc. In the letter, PIA expresses many concerns and raises serious questions about the MetLife-GM pilot program. In addition, we reiterate the value of independent insurance agents and we tell MetLife that we think they are headed down the wrong path.

In the pilot program started on July 6 in two states, Washington and Oregon, GM provides  automobile insurance coverage from MetLife to customers who purchase or lease new 2010, 2011, or 2012 GM vehicles. One year of insurance is included with the vehicle purchase. It is our understanding that if customers do not want the coverage, they do not receive a discount in the price of the vehicle. The included coverage is not provided through an agent. It is not "free" insurance, in that it is a group policy with the premiums paid by GM.

"MetLife has built a strong brand by offering quality insurance products through the advice and counsel of professional insurance agents," the PIA Presidents say. "Distributing sophisticated insurance products through car dealers erodes your brand and devalues the independent agency system. Insurance is not a commodity like floor mats."

Read the PIA Presidents Letter to MetLife Here

The MetLife-GM program is being offered in a 60-day pilot in Washington and Oregon.

"MetLife is now running its pilot program in Washington and Oregon but we understand the company has received permission to market this program in 17 states," said Clark Sitzes, executive vice president of the nine-state PIA Western Alliance. "Three states have rejected the program. We're working with the insurance departments of the two states and our other seven and asking questions and wanting answers."

In an article on July 19, the National Underwriter quotes insurance department spokespersons from Oregon and Washington. Both said the departments have received numerous complaints and questions from independent agents. Both departments said the programs were fully reviewed and determined to be legal. The article quotes PIA's letter and also quotes David Hammarstrom, a MetLife spokesman, who says the program "has been fully vetted and approved in advance by appropriate insurance-regulatory bodies" in Washington and Oregon.

PIA was first to break the news of the MetLife-GM pilot program. On July 1 (at the start of the Fourth of July weekend and just six days before the program's launch), MetLife notified PIA National of the program in a call with Executive Vice President & CEO Len Brevik and PIA National senior staff. PIA National immediately notified PIA West and assisted them in drafting an initial bulletin which PIA West distributed on July 1. "It's important to note that PIA National scooped our competition," said Sitzes. After the PIA letter to MetLife's CEO was delivered, an update bulletin was sent nationwide to all PIA directors and state affiliates.

Read PIA's MetLife letter: PIA Letter to MetLife President & CEO Kandarian (July 12, 2011)
Read PIA's comments in MetLife article: Agents Group Protests MetLife Free Insurance Program (National Underwriter 7/15/11)

Read more on the MetLife's program: MetLife, Regulators Say Program In Full Compliance (National Underwriter 7/19/11)