An insurance and financial holding company settled SEC charges for failing to maintain (i) accurate books and records and (ii) a sufficient system of internal account controls in connection with its annuities products.
According to the SEC, MetLife, Inc. disclosed the following two significant errors in its accounting procedures for reserves:
improperly reducing the liability for future policy benefits while increasing the corresponding income (a/k/a "releasing reserves") for certain annuitants that failed to respond to the holding company's mailing attempts; and
overstating reserves and understating income due to data errors in the holding company's valuation model.
Without admitting to or denying the allegations, MetLife agreed to (i) cease and desist from further violations SEA Section 13(b)(2)(A) and 13(c)(2)(A) and (ii) pay a civil money penalty of $10,000. In regard to the penalty amount, the SEC took into consideration MetLife's (i) discovery and disclosure of the violations and (ii) cooperation with the agency.