Met Life to pay for probe of charges against agents Unethical methods in selling policies alleged

The Metropolitan Life Insurance Co. yesterday agreed to pay for an independent investigation of charges that its insurance agents engaged in unethical practices in selling tens of thousands of whole life policies around the United States.

Florida's insurance commissioner has charged that Metropolitan's 100-member office in Tampa trained its agents to misrepresent the whole life insurance policies they were selling as retirement accounts.


Life insurance policies differ from investment products such as annuities in a number of ways. But perhaps most significant for agents is that as much as 55 percent of the first year's premium is turned over to them as a sales commission. Annuities and other retirement vehicles are far less lucrative to agents.

In addition to Florida, insurance departments in Pennsylvania, North Carolina and West Virginia said this week that they were investigating charges of unethical or illegal sales methods of Metropolitan agents in their areas. Some of the practices were similar to those described in Tampa. Officials in Texas said they had also received complaints about Metropolitan agents.


Misrepresentation of whole life policies has a long history in the insurance industry. But the allegations involving so many agents and policies of Metropolitan threatens to tarnish the image of a company that has based its sales on a reputation of financial and ethical prudence.

The president of Metropolitan, Ted Athanassiades, met with Florida's insurance commissioner, Tom Gallagher, yesterday in New York, as the insurance giant attempted to contain the damage.

It agreed to permit Mr. Gallagher to appoint an investigator of his choice and pay the cost of a one-month study of the problem. Mr. Gallagher agreed to delay legal action until the report was completed.

The Florida department has charged that Metropolitan agents in the Tampa office picked nurses around the country as a target for a pitch involving the sales of "retirement plans" designed especially for nurses.

The agents, the department said, referred to the premiums as "deposits," and to themselves as "nursing representatives," not insurance agents. Metropolitan auditors uncovered the practices in 1991, the department said, but the practice continued through this year.

Charles Sahner, a spokesman for Metropolitan, said that in 1991 the company headquarters in New York found that "unauthorized sales literature" was being used by the Tampa office, but executives believed they had put an end to the practice.

As a result of the charges, Mr. Sahner said, Metropolitan has sent letters to 18,000 nurses who had been sold policies by the Tampa office over the past five years, offering refunds or the opportunity to have the premiums plus interest they had paid credited to an annuity.

"We find these allegations deeply disturbing," he said. "If, in fact, we find that Met Life employees did engage in this kind of activity, we will take immediate and strong action."