Due to an investigation concerning some tens of thousands of insurance payments and inquiry filed by the Security and Exchange Commission (SEC), insurance provider MetLife has moved the release its 2017 Q4 earnings, delaying the announcement several weeks.
In December, the insurance giant—which handles the retirement services of 600,000 people—reported that it was locating approximately 30,000 retirees owed $150 or less per month in annuity benefits. Days later, New York and Massachusetts regulators began cracking down on MetLife to uncover more information as well as make sure the benefits are not only found, but paid.
One of the main issues MetLife is facing is finding those who have either changed jobs or relocated. In its December Investor Outlook call, MetLife said it was “undertaking a review of practices and procedures used to estimate its reserves” for the missing annuitants.
MetLife management attributed the snafu to a “material weakness in internal control over financial reporting.”
“In connection with MetLife’s review and enhancement of the processes and procedures relating to its Retirement and Income Solutions business in the United States, MetLife is currently reviewing its processes and procedures for identifying unresponsive and missing international group annuity annuitants and pension beneficiaries,” the company said in a statement. “In addition, MetLife recently initiated an ongoing global review of its processes and procedures for identifying unresponsive and missing policyholders and beneficiaries for the other insurance and annuity products it offers. MetLife is not currently aware of any material deficiencies in its identification of unresponsive or missing annuitants, policyholders or beneficiaries with respect to such products under review.”
Although the company expects to increase its financial reserves by as much as $575 million and would take a pre-tax hit, MetLife has postponed the official reveal, from later this week to February 13. CNN Money reports that MetLife shares dropped 8% hours after the Monday announcement.
“MetLife had previously informed its primary state regulator, the New York Department of Financial Services, about this matter and is responding to questions from them and other state regulators. The US Securities and Exchange Commission enforcement staff has also made an inquiry regarding this matter and MetLife is responding to its questions. To date, MetLife is not aware of any intentional wrongdoing in connection with this matter,” the company said.