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N.Y. regulators say MetLife to pay $60 million for violations

The MetLife building is seen in New York, March 8, 2010. REUTERS/Shannon Stapleton
The MetLife building is seen in New York, March 8, 2010. REUTERS/Shannon Stapleton

By Karen Freifeld

NEW YORK (Reuters) - Insurer MetLife will pay $60 million because two subsidiaries solicited insurance business in New York without a license, New York authorities said on Monday.

Investigations by the state's Department of Financial Services and the Manhattan District Attorney's Office found that MetLife subsidiaries ALICO and DelAm, bought from AIG in 2010, misrepresented their business activities to regulators.

An investigation is ongoing into violations by AIG and its subsidiaries on conduct before the MetLife purchase, Benjamin Lawsky, the state's top financial regulator, said in a statement.

Manhattan District Attorney Cyrus Vance said in a statement that the two subsidiaries used Manhattan-based staff to solicit insurance business even though neither company was licensed to do so in New York.

Metlife will pay a $50 million fine to Lawsky's agency. Another $10 million will go to the Manhattan District Attorney's office as part of a deferred prosecution agreement.

AIG disagrees that the conduct violates the law, according to a statement from the company.

"A New York license is required only where a foreign insurer issues policies covering New Yorkers," the statement said, adding there was no evidence anyone was harmed.

(Reporting by Luciana Lopez and Karen Freifeld; Editing by Meredith Mazzilli)