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MARYLAND INSURANCE ADMINISTRATION

JUNE 24, 2004

The territorial Vice-President was to submit a plan of action to correct the customer service and contact issue deficiencies. The examiners did not see any of these plans. The Company is directed to provide the plan of action developed to correct the deficiencies.

The audit report cited the following replacement data: Agency 76D Improper replacement activities: Agents……………….…….3 Total Replacements……….5 Agency L56 Improper replacement activities: Agents………………….…26 Total Replacements………47 The examiners questioned Agency management about the large number of replacements noted in the internal auditors’ report. The Agency manager assured the examiners that internal audits, and the Company Managing Replacement System (MRS) were designed to detect and manage replacements. It was also explained that the large percentage of replacements were due to the Company making the offer to policyholders to reverse or rewrite certain variable contracts that had been the subject of client complaints. According to the Agency management the large number of replacements detected by the auditors and the ‘MRS” procedures are indicators that the Company’s replacement detection procedures are working.

Based on Agency documentation provided and the review of Home Office policies the examiners suggest that agents receive more comprehensive replacement training.

The Company has already taken steps to implement enhancements in its replacement training. For example, the Company has created an online Ethics & Compliance Replacement Tutorial and Test for all existing and newly hired MetLife Financial Services’ field associates including Managing directors, Agency Directors, MLFS active Representatives, retired representatives, brokers, Agency Administrator, Regional Managers, Regional Administrators and sales support personnel. All new representatives are required to complete the replacement

tutorial within the first completion of the on-line least every three years.

eight weeks replacement

of their employment. training will be required

Going for all

forward, documented field representatives at

_____________________________________________________________________________________________

MET LIFE REPORT NO. 786-01

PAGE 16

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