Chapter 18. MetLife: Poorly Controlled Sales Practices
In August 1993, the state of Florida cracked down on the sales practices of giant Metropolitan Life, a company dating back to 1868, and the country's second-largest insurance firm. MetLife agents based in Tampa were alleged to have duped customers out of some $11 million. Thousands of these customers were nurses lured by the sales pitch to learn more about "something new, one of the most widely discussed retirement plans in the investment world today." In reality, it was a life-insurance policy in disguise, and what clients were led to think were savings deposits were actually insurance premiums.
As we will see, the growing scandal rocked MetLife, and eventually brought it several billion dollars in fines and restitutions. What was not clear for certain was the full culpability of the company: Was it guilty only of not monitoring agent performance sufficiently to detect unethical and illegal activities, or was it the great encourager of such practices?
RICK URSO: THE VILLAIN?
The first premonitory rumble that something bad was about to happen came to Rick Urso on Christmas Eve 1993. Home with his family, he received an unexpected call from his boss, the regional sales manager. In disbelief, he heard there was a rumor going around the executive suites that he was about to be fired. Urso had known that the state of Florida had been conducting an investigation, and that company auditors had also been looking into sales practices. ...