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MetLife to Refund AIG After $190 Million Tax-Case Win

MetLife Inc. (MET) said a unit won a $190 million tax case in a Tokyo court and was required to send part of the refund to American International Group Inc. (AIG), which previously owned the business.

The American Life Insurance Co., acquired from AIG in 2010, won the award, including interest and penalties, and had collected $160 million, New York-based MetLife said yesterday in a regulatory filing outlining the company’s condition at the end of 2012.

MetLife is “required to remit the refund to AIG net of certain amounts it can retain as a counter claim,” according to the filing, which didn’t state the size of the refund.

Chief Executive Officer Steven Kandarian is focusing on international expansion to boost profits at MetLife. His company acquired Alico from AIG in 2010 for about $16 billion to expand beyond the U.S. AIG sold the unit, which had operations in more than 50 countries, to help repay a U.S. bailout.

The tax case stemmed from “unrealized foreign exchange losses on certain securities held by American Life prior to the Alico acquisition,” MetLife said in the filing.

MetLife will record a $30 million charge tied to the refund in the current quarter, according to the filing. The insurer will also incur charges of $60 million to $85 million related to exiting banking, after costs of $163 million last year tied to the move, the filing shows.

Photographer: Scott Eells/Bloomberg

MetLife Inc. will record a $30 million charge tied to the refund in the current quarter, according to the filing. Close

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Photographer: Scott Eells/Bloomberg

MetLife Inc. will record a $30 million charge tied to the refund in the current quarter, according to the filing.

Banking Exit

Kandarian retreated from banking to limit oversight from the Federal Reserve, which blocked MetLife from raising its dividend or buying back shares in a review of how the largest U.S. lenders would fare in a financial crisis. MetLife reached deals to sell deposits to General Electric Co., mortgage servicing rights to JPMorgan Chase & Co., and a reverse-mortgage portfolio to Nationstar Mortgage LLC as part of the exit.

In servicing, MetLife sold net assets of $608 million for $580 million of consideration, it said in the filing. The insurer received $190 million last year and most of the remaining amount in January, according to the filing. Chris Breslin, a MetLife spokesman, said the sums include both forward and reverse mortgages, and declined to comment further.

Jon Diat, a spokesman for New York-based AIG, declined to comment on payments related to Alico.

MetLife climbed 2.4 percent yesterday to $35.70 in New York trading. AIG advanced 0.2 percent to $37.77.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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