MetLife settles on license issues, AIG balks

MetLife would only say in its statement that, "The agreement with DFS makes clear that our Global Employee Benefits business can continue to have meetings and discussions in New York with our multinational clients and prospects about the capabilities of MetLife's non-U.S. affiliates and partners."

That is the point AIG is making. Lawsky also said that the NYDFS is further requiring that MetLife take immediate steps to come into compliance with New York Insurance Law. The agreement requires licensing by DFS of the insurers and agents operating out of New York. It said that ALICO and DelAm will be prohibited from, among other activities, underwriting, binding, or negotiating the terms or conditions of an insurance policy or contract – or advertising – in New York on behalf of alien or foreign insurers while they work to come into compliance with New York Insurance Law.

The dispute centers on allegations that sales reps for the two companies solicited in New York global employee insurance on behalf of ALICO and DelAm and their subsidiaries or affiliates, as well as insurers not affiliated with either company, without any such insurer being duly licensed in New York.

The state agencies allege that the sales representatives were engaged in direct selling in New York to multinational companies on behalf of ALICO and DelAm and their subsidiaries and affiliates, as well as insurers not affiliated with either company, but does not get into the issue raised by AIG that the sales were not for people domiciled in New York.

Lawsky's statement also alleges that sales representatives of the two companies conducted "road shows" in New York in order to solicit and sell group insurance products of ALICO, DelAm, and their subsidiaries, affiliates and other unaffiliated insurers.

"The sales representatives, for example, conducted a 'road show' at the AIG corporate dining room at 70 Pine Street for multinational companies with operations in Brazil," Lawsky charged. "The Brazil 'road show' was designed to generate new sales in the amount of $25 million."

Moreover, Lawsky alleged, sales reps for the two companies "had incentive compensation plans that compensated them for placing business with DelAm and the foreign operations of ALICO and its subsidiaries and affiliates and other unaffiliated insurers."

MetLife impliedly defended the activities of the two companies by saying that, "With the globalization of the economy, multinational companies increasingly need global employee benefits solutions.  We are extremely proud of our Global Employee Benefits business, which provides financial protection to workers around the globe and supports New York's reputation as the crossroads of global commerce."

See also: 

Talks on ALICO problems underway

AIG back on the offensive, chairman says

AIG focusing on Benmosche successor