A U.S. District Court judge has dismissed a lawsuit against MetLife Inc. that alleged the insurer had gained "unjust enrichment" for the years it had not paid retirement benefits to a group annuity contract beneficiary.
The lawsuit had originally been filed in the U.S. District Court in New York in June by Edward Roycroft, who worked at Martindale-Hubbell, a legal information services company that purchased a group annuity contract from MetLife. Mr. Roycroft alleged he should have been receiving benefits from MetLife upon his retirement in 1999 and only learned in 2012 that they were owed to him. A lump sum was paid to Mr. Roycroft in 2013 to make up for the lack of payments.
In January 2018, MetLife said it had uncovered a "material weakness" in financial reporting and reached out to regulators about its lapses after determining that it didn't have enough money set aside to pay some annuity and pension customers. The insurer followed up in a February 8-K filing with the Securities and Exchange Commission that about 25 years ago, "companies that are or have been MetLife Inc. subsidiaries established a practice of releasing the full insurance liability after two attempts at contacting these annuitants, based on the presumption that these annuitants would never respond and had not become entitled to benefits based on certain contractual provisions." MetLife also said in the February filing that it has added $510 million back into the annuity reserves set aside for the 13,500 participants that had been affected and those participants, once located, would receive payments with interest.
U.S. District Court Judge Alvin K. Hellerstein on Monday dismissed the lawsuit, saying that the dispute was a contractual dispute and thus MetLife did not gain "unjust enrichment" from the more than $500 million it had not previously set aside in annuity reserves.
MetLife spokeswoman Kim Friedman could not be immediately reached to provide comment.