A.M. Best Comments on Credit Ratings of MetLife, Inc. and Subsidiaries Following Disclosure of Material Weakness in Internal Controls

OLDWICK, N.J.--()--A.M. Best has commented that the Credit Ratings (ratings) of MetLife, Inc. (MetLife) (headquartered in New York, NY) [NYSE: MET] and its insurance subsidiaries remain unchanged following the announcement of a second material weakness in internal controls, both of which impacted 2017 year-end results. On March 1, 2018, MetLife filed its 2017 Form 10-K with the U.S. Securities and Exchange Commission, which included a revision related to a release of reinsurance reserves for its legacy Japanese variable annuity block following an internal review of reserving practices. The reserve release increased full-year 2017 net income by $264 million and shareholders’ equity by $708 million. This announcement of this material weakness followed a previously reported material weakness regarding under-reserving practices within MetLife’s group annuity business.

While there is concern about the two material weaknesses, A.M. Best notes that MetLife is in the process of implementing remediation practices and is engaging a third party to undertake a comprehensive review of the facts and circumstances giving rise to the material weaknesses. A.M. Best notes that the auditors have issued an unqualified opinion on MetLife’s consolidated financial statements, despite issuing an adverse opinion regarding internal controls over financial reporting practices. A.M. Best will monitor the remediation of these weaknesses and any future disclosures regarding MetLife’s internal control environment, which could result in a negative rating action if MetLife fails to effectively remedy the practices or there are additional disclosures that demonstrate a further decline in operational controls or reserving practices.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Michael Adams, +1 908-439-2200, ext. 5133
Senior Financial Analyst
michael.adams@ambest.com
or
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Rosemarie Mirabella, +1 908-439-2200, ext. 5892
Director
rosemarie.mirabella@ambest.com
or
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Michael Adams, +1 908-439-2200, ext. 5133
Senior Financial Analyst
michael.adams@ambest.com
or
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Rosemarie Mirabella, +1 908-439-2200, ext. 5892
Director
rosemarie.mirabella@ambest.com
or
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com