MetLife Securities Inc will pay $25 million to in a settlement stemming from misconduct related to switching customers' variable annuities. The sanction includes a $20 million fine and $5 million to be paid to customers.
MetLife's "annuity switching" business generated at least $152 million in commissions between 2009 and 2014, FINRA said.
An annuity is an insurance product that offers investors steady income payments, typically in exchange for a lump-sum investment. Account values of variable annuities, a mix of life insurance, mutual funds, and tax-deferred retirement plans, vary depending on how those investments perform.
"Annuity switching" happens when a broker encourages a client to trade an older annuity to buy a different one, often at significant cost to the client and benefit to the broker.
MetLife, during the period, misrepresented or omitted at least one significant fact about costs and certain features of customers' existing variable annuities in nearly three-quarters of 36,000 applications for switches.
MetLife to pay $25 million for annuity sales violations