Summary
MetLife Inc. (MET) has filed an 8-K report detailing the termination of significant asbestos indemnity insurance policies. On September 29, 2008, its subsidiary, Metropolitan Life Insurance Company (MLIC), entered into termination agreements for three policies with affiliates of Swiss Re and American International Group, Inc. These policies provided coverage for asbestos-related claims up to $1.5 billion above a $400 million self-insured retention. The termination resulted in MLIC receiving securities valued at approximately $115 million on September 26, 2008, and is expected to receive the remaining approximately $600 million in cash by January 30, 2009. Despite the substantial recovery, MLIC will recognize a net loss of $22.9 million for the three months ended September 30, 2008, related to this commutation. This event represents a conclusion to these specific asbestos liability exposures for MetLife.
Key Highlights
- 1MetLife's subsidiary, MLIC, terminated three material definitive agreements related to excess asbestos indemnity insurance policies.
- 2The terminated policies provided coverage for asbestos-related claims with a limit of $1.5 billion above a $400 million self-insured retention.
- 3MLIC received approximately $115 million in securities as an initial payment upon termination.
- 4An additional approximately $600 million in cash is expected to be received by MLIC on or before January 30, 2009.
- 5MetLife will recognize a net loss of $22.9 million, after tax, in the third quarter of 2008 due to the termination.
- 6The termination agreements were effective as of September 30, 2008.
- 7The counterparties to the terminated policies were affiliates of Swiss Re and American International Group, Inc.