MetLife owes customers for annuity payments they never received going back for about 25 years, the company disclosed Tuesday.
The company said a new internal review of its records shows that about 13,500 recipients were owed annuities payments they never received. That's a bit more than 2% of the total group of 600,000 customers who had the annuities.
The company said it did not make a sufficient effort to contact the recipients before writing them off as undeliverable. The company had previously said that regulators are looking into the problem with the missing payments.
An annuity is a fixed sum of money paid to someone each year, typically for the rest of their life. It is a key product for insurers such as MetLife.
The company said an examination of its practices found a "material weakness" in the way it handled the payments. MetLife accounted for the missed payments in earlier earnings reports, some of which will now be restated. The problem had also caused the company to delay its fourth quarter earnings report originally scheduled for January 31 to Tuesday evening.
The problem is "unacceptable and deeply disappointing," said CEO Steven Kandarian. "We can and will do better."
In its earnings report it said it is now setting aside $510 million to make those payments.
The action reduced its operating income 36% from a year ago to $678 million for the quarter.
Shares were down slightly in pre-market trading Wednesday following the report.