Howard Metzenbaum

  • Howard Metzenbaum (D-OH)
    • (b.June 4, 1917 – d.March 12, 2008)
    • 1943-1952 - Ohio House of Representatives and Senate
    • 1974, 1976–1995 - US Senator
  • Why is this flimflammery allowed to continue?
  • Where are the laws to prevent companies from misleading people?  

--  Senator Howard Metzenbaum (D-OH)

1993 0525 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance?, Senator Howard Metzenbaum (D-OH)  ---  [BonkNote

1980 0207 - Federal Register - Senator Howard Cannon (D-NV),  Howard Metzenbaum (D-OH),  John Durkin (D-NH), re: FTC, McCarran-Ferguson Act - p2382

  • 1979 0524 - GOV (Senate) - Cost Disclosure in Life Insurance, Howard Metzenbaum (D-OH)  ---  [BonkNote]
  • 1991 0612 - Press Club - Insurance Insolvencies - [VIDEO-CSPAN]
    • Belth (Professor), James McNeill (Insurance Agent)
  • 1992 0623 - GOV (Senate) - Consumer Disclosure of Insurance, Howard Metzenbaum (D-OH)  ---  [BonkNote]
  • 1993-Vol. IB, NAIC Proceedings - Letter - 1992 0918 - Senator Howard Metzenbaum (D-OH) - p810-811 - 2p
  • 1993 0525 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance?, Howard Metzenbaum (D-OH)  ---  [BonkNote]
  • 1993 - LC - John Hancock Mutual Life Insurance Company, Petitioner v. Harris Trust and Savings Bank, as trustee of the Sperry Retirement Trust NO. 2
    • Brief for Senator Howard Metzenbaum et al. as Amici Curiae
    • If the plan, on the other hand, is "trapped" by an unwise insurance contract, the trap is one of its own making.
      • Those amici are in a far better position than this Court to persuade Congress to protect pension plans from their own mistakes and misjudgments.
      • Nothing in either the text or the logic of the guaranteed benefit policy exception provides such protection.
  • 1995 - LC - v John Hancock
  • 1997 1030 - GOV (Senate) - Class Action Lawsuits: Examining Victim Compensation and Attorneys' Fees, Charles Grassley (R-IA)  ---  [BonkNote]
  • 1999 - LC - Richard Duhaime, Plaintiffs, Appellees, v. John Hancock Mutual, Defendants, Appellees, Howard M. Metzenbaum, Appellant.
  • Corporate Responsibility
    • [VIDEO-CSPAN]
      • Consumer advocates, including former Senator Metzenbaum (D-OH), testified about the misstatement of corporate earnings and other forms of fraud and the effects of this on stockholders and consumers. They also talked about the need for accounting transparency and stronger federal regulations.
  • 1999 - LC - Richard Duhaime, Plaintiffs, Appellees, v. John Hancock Mutual, Defendants, Appellees, Howard M. Metzenbaum, Appellant.
    • No. 98-2139. Decided: June 28, 1999, United States Court of Appeals,First Circuit.
    • caselaw.findlaw.com/court/us-1st-circuit/1461431.html
      • This appeal is an offshoot of a massive securities fraud, fraud, and breach of fiduciary duties class-action lawsuit brought against John Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance Company, and John Hancock Distributors, Inc. (collectively “John Hancock”).  
      • The underlying suit, filed in September 1995 on behalf of nearly four million present and former policyholders, challenged a number of John Hancock's sales and marketing practices from 1979 through the mid-1990s.  
      • On June 6, 1997, the putative class entered into a Stipulation of Settlement with John Hancock.  
      • Eventually, the district court certified the class and approved the settlement, explaining its reasoning in a comprehensive opinion.   See Duhaime v. John Hancock Mutual Life Ins. Co., 177 F.R.D. 54 (D.Mass.1997) (“Duhaime I”).  
      • Because the particulars of the lawsuit and the settlement terms are largely irrelevant to our analysis, we refer interested readers to Duhaime I and confine our focus to facts pertinent to this appeal.
    • Metzenbaum suggests that class counsel, as well as John Hancock, may have been involved in negotiating the side settlement, and we accept the suggestion for purposes of this appeal.
    • We simply have no tradition of court intervention to ensure that similarly victimized plaintiffs who have retained separate counsel and have made different litigation decisions get similar results. 
    • We come then to the basic question:  Are Metzenbaum and the Rose Objectors so “similarly situated” that we should view any difference in their ultimate recoveries as evidence of a systemically induced breach of a fiduciary duty owed to Metzenbaum and absent class members?
      • We think the answer clearly is “no.”  
    • In his appellate brief, Metzenbaum hints at but does not fully develop two additional rationales for court intervention which might be taken as alternatives to his similar-results-for-the-similarly-harmed argument.
      • ... The first is that courts should intervene to prevent possible extortion;  
      • ... the second is that courts should intervene to prevent possible fraud.  
      • Before we conclude, we believe it important to say a few words about each of these two arguments.
    • While we have no reason to believe that the Rose Objectors or Attorney Nygaard extorted their appellate settlement, we recognize that a class member and his or her attorney conceivably could object to a proposed settlement solely to set up an appeal designed to obtain a nuisance value recovery and/or advantageous fee arrangement.
    • Metzenbaum mentions the possibility of extortion in connection with the side settlement of the Rose Objectors' appeal.
      • But in doing so, he neither argues that extortion might have caused class counsel to bargain away some portion of the class's negotiated recovery nor seeks to assert a third-party interest-e.g., the interest John Hancock (the party most obviously positioned to press an extortion argument under the circumstances) might have in not being subjected to an extortionate appeal-on grounds that John Hancock is unlikely to seek court review of the side settlement.  
      • Instead, Metzenbaum merely suggests that extortion of this type will cause a party opposing a class action to hold back funds that otherwise might have been offered to the class in the class settlement.  
      • Disclosure and approval is needed, he suggests, to ensure that the class has access to these funds in settlement negotiations.
      • ⇒  We think that this line of argument is answered by what we already have stated.  
    • But after final judgment has entered, our strong interest in the finality of judgments leads courts to intervene in a search for evidence of fraud only if there has been some showing that a fraud actually has occurred.
      • Plainly, there has been no such showing here.
    • Thus, it does not open the door to post-judgment discovery where there is nothing more than speculation that a fraud might have occurred. 
    • Affirmed. Costs to appellees.
  • First to comment was Sen. Howard Metzenbaum (D-Ohio):
    • He cited a report issued by the NAIC 13 years ago that reached many of the same conclusions, but the disclosure system it found to be "seriously flawed" was still in place today.

1993-3, NAIC Proceedings

  • These policy illustrations were created by five different companies as a tool for selling the same 45-year-old man $300,000 worth of life insurance to protect his family financially when he dies.
  • But the only thing that these five illustrations have in common is that none of them disclose enough information.
  • (p196) - Overwhelming numbers of Life Insurance buyers do not even understand which, if any, elements of their sales illustrations are guaranteed.
    • For instance, as we demonstrated in our hearing, an Alexander Hamilton illustration did not make it clear that there was no guaranteed death benefit after 12 years.
    • How absurd can it be? That means that at age 57, this 45-year-old man will quite possibly have to pay a lot more to get new life insurance, if he can get it at all.
  • Frankly, no 45-year-old man can make an informed choice about which policy to buy on the basis of any of these illustrations.

--  Senator Howard Metzenbaum

1993 0525 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance?, Howard Metzenbaum (D-OH)  ---  [BonkNote]

  • "These policy transfers treat policyholders like commodities, trading them like baseball cards," Mr. Metzenbaum said in a statement.
  • The acquiring companies are often "in such poor financial shape that they couldn't attract policyholders but had to buy them wholesale, without their consent."

1994 0328 - NYT - Transfers By Insurers Under Fire - [link]

  • Almost 1 year ago, I chaired a hearing in this room looking at sales practices in the life insurance industry.
    • That hearing did not make the network news and was not broadcast by C-SPAN.
    • Put bluntly, it was a pretty dull hearing.  (p1)

--  Senator Howard METZENBAUM (D-OH)

1993 0525 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance?, Howard Metzenbaum (D-OH)  ---  [BonkNote]

  • Opening Statement of Senator Metzenbaum
  • Today the Subcommittee on Antitrust and Monopoly begins its examination of cost disclosure in life insurance.
    • Life insurance is a tremendous business in this country.
      • Americans carry 140 million ordinary life policies, with nearly $1.3 trillion in coverage.
      • Cash-value life insurance accounts for more than 20 percent of total savings in this country-second only to deposits in savings and loan institutions.
    • The business of life insurance is presently exempt from the Federal antitrust laws under the McCarran-Ferguson Act.
      • It is the only major financial business without Federal regulation.
      • This is a unique situation.
  • It is fair to ask how well has the industry operated under this system.
    • Do consumers of insurance enjoy the benefits of competition?
    • Are consumers able without heroic efforts to find the best coverage for their needs at the lowest cost?
    • And are consumers able to readily understand precisely what kind of coverage they are buying?
    • My staff has conducted a major investigation of these issues.
  • I must say today that I was shocked when I saw its findings.  (p1)

1979 0524 - GOV (Senate) - Cost Disclosure in Life Insurance, Howard Metzenbaum (D-OH)  ---  [BonkNote]

  • I think any way that we can make illustrations more understandable to the public is certainly going to help us.
    • We've seen the problems that have occurred when Senator Howard Metzenbaum (D-OH) was given an illustration with a vanishing premium, and he had absolutely no idea that he had bought a policy that was not paid up in four years.
    • It caused many problems for the industry; it caused many problems because the press got involved, and the press doesn't understand the products as well as it thinks it does.

--  Linda M. Lankowski

1995 - SOA - Practical Illustrations and Nonforfeiture Values, Society of Actuaries - 14p

  • [Bonk: Connect with:
    • Legal Case - Video - 15-16740 Kamies Elhouty v. Lincoln Benefit Life Company -  Judge: there used to be cases...]
    • 1995 - SOA - Practical Illustrations and Nonforfeiture Values, Society of Actuaries - 14p
      • Susan Oberman Smith: I think that one problem, even with the illustration disclosure, is that you are still not controlling what the agent actually says to the client, even when he or she sees that illustration. 
        • I've been in many situations where our agent says, "I sold them a ten-pay contract and it was paid up in ten years," and I say, "It's not paid up."
        • I don't know how you can handle the idea of the agent telling somebody that it's a paid-up contract when it really was a vanishing-premium-concept contract.
  • 1999 - LC - Richard DUHAIME, et al., Plaintiffs, Appellees, v. John Hancock Mutual Life Insurance Company, et al., Defendants, Appellees, Howard M. Metzenbaum, Appellant. - No. 98-2139. - Decided: June 28, 1999, United States Court of Appeals, First Circuit
    • 1:96-cv-107060
  • 2017 - LC - Larson v. John Hancock Mutual Life Ins
    • 2017civil01703
    • U.S. Court Of Appeals, First Circuit
    • 07/20/2017 - 09/04/2018
  • 1991 0612 - National Press Club - Insurance Insolvencies - [VIDEO-CSPAN]
    • Senator Howard Metzenbaum (D-OH) known for his contentiousness on the floor of the Senate, addressed a luncheon audience at the National Press Club.
    • He discussed the recent spate of financial crises in the insurance industry, such as the financial collapse of Executive Life Insurance company, which has left hundreds of thousands of policy holders in California and New York unsure of the state of their insurance coverage. 
    • Sen. Metzenbaum criticized state insurance regulators for failing to adequately maintain knowledge of the financial affairs of the insurance agency.
      • He claimed insurance laws written by the insurance industry, inadequate staffing, infrequent examinations, inadequate capital regulation, and lack of coordination between the states are the reasons for the instability of the insurance industry.
    • He recounted several “accounting gimmicks” used by the insurance industry to appear financially solvent despite true financial instability
  • Senator METZENBAUM: Do you think these things are going to happen soon?
  • Judy Faucett (NAIC Consultant /SOA/AAA-Actuary): Well, I certainly hope they are going to happen in my lifetime.

  • Senator METZENBAUM:
    • I hope you have a long lifetime, but I sure hope that the insurance industry moves a lot faster than that, and I am not even talking about my lifetime.
    • I think yesterday was too late.
    • I think that for this industry to be guilty of such reprehensible
      practices and to sit on their hands and do nothing I just believe it is incredible.
    • The only reason they don't do something about it is because the American people don't know about it.
    • I am hopeful that as a result of these hearings they will know more, but I am a realist enough to know that 1 day's news story or commentary, or whatever, with respect to radio or TV does not cause these impregnable companies to move very rapidly.
    • I think it is shameful.
    • In your professional opinion, will this situation get worse for consumers if your recommendations are not adopted by the industry?
  • Ms. FAUCETT: I don't know that it will get worse, but certainly it will not get any better.

1992 0623 - GOV (Senate) - Consumer Disclosure of Insurance, Howard Metzenbaum (D-OH)  ---  [BonkNote]

  • ....on concerns relating to the adequacy of financial disclosures made in connection with the purchase of whole life insurance policies.
  • Furthermore, the NAIC was being pushed by Senator Howard Metzenbaum who wanted to accuse the regulatory structure of not doing its job and then to bring regulation up to the federal level 

-- Frank S. Irish, ASB - Actuarial Standards Board

1996 - SOA - Professional Standards Affecting Life Actuaries, Society of Actuaries - 18p

  • 1994 0120 - NAIC Legislative Outlook and Update
  • (p9) - Senator Howard Metzenbaum (D-OH) who has reintroduced legislation to create federal regulatory agency responsible for insurance is in his final months in office.
    • Last year the Ohioan announced that he would not run for reelection in 1994.
    • He also introduced 1619 the Insurance Protection Act of 1993.
    • While Senator Metzenbaum has used his chairmanship of the Judiciary Subcommittee on Antitrust Business Rights and Monopolies to examine number of insurance-related issues including life policy illustrations, assumption reinsurance and guaranty finds his subcommittee does not have jurisdiction over insurance. 
    • The subcommittee that does have jurisdiction the Commerce Science and Transportation Subcommittee on Consumer has not announced any plans for hearings on the Metzenbaum bill. Indeed Senator Richard Bryan D-NV that panels chairman will probably wait to see what action if any the House might take on insurance regulation.
    • With strong possibility of congressional hearings looming in the background Senator Metzenbaum has written to the Securities and Exchange Commission SEC regarding the sales
      practices of the Metropolitan Life Insurance Company.
    • Senator Metzenbaums letter of December 17 is at Attachment number of states are examining the marketing of life insurance products as if they were retirement pension plans.
    • Indeed the NAIC has formed the EX Special Committee on Metropolitan Life to pursue these issues Senator Metzenbaum had planned to hold hearing on this issue on January 24 but has canceled it for later date.
    • His staff contemplates hearing with company officials as well as state insurance regulators testifying.
  • (p122) - Howard Metzenbaum (D-OH) - I will tell you what we do need.
    • We need the insurance industry to step up to the bar, to step up to Congress, and say "Look, we know there are problems and this is what we will do or what we suggest you do."
    • What they are saying is, "We are running away from the problem."
  • (p122) - Howard Metzenbaum (D-OH) - The industry is not that strong, and State regulation is a failure.
    • It is not working.
    • The insurance regulators-some are good but there are some exceptions.
    • The fact is that the State regulators, first of all, do not have the knowledge to do that which has to be done in connection with this industry.
    • They are not that well staffed, and they are not going to get that well staffed overnight.
    • Second, I am not sure that they have the resources to do so.
  • (p122) - Howard Metzenbaum (D-OH) - I say to you, Mr. Chairman, I believe that Congress has to deal with this problem promptly.
    • This subject has a sense of urgency about it.
    • There is no more powerful economic industry in the Nation than the insurance industry.
    • They have an impact upon the entire economy of this country, and I think that we all ought to be working together. 

1991 0227, 0507, 0509 and 0523 - GOV (House) - Insurance Company Solvency, (CSPAN) Insurance Company Insolvencies, Cardiss Collins (D-IL)  ---  [BonkNote]

  • 1997 1030 - GOV (Senate) - Class Action Lawsuits: Examining Victim Compensation and Attorneys' Fees, Charles Grassley (R-IA)  ---  [BonkNote]
    • [PDF-97p-GooglePlay]
    • (p59) - Brian Wolfman, attorney, Public Citizen
      • John Hancock Mutual Life Insurance Company
        • This is a case brought on behalf of hundreds of thousands of current and former policy holders who were subject to false or deceptive sales practices by John Hancock.
        • The settlement, which was presented to the district court for its approval just last week, creates an elaborate claims payment system to provide individualized relief to any Hancock policyowner who can show that he or she was subjected to improper sales practices by Hancock.
          • The claims system is weighted in a claimant's favor, and some claimants should automatically receive not only whatever compensation is owing to them, but also a small bonus.
          • The settlement also provides modest general relief in the form of discounts on John Hancock insurance and in vestment products to class members who choose to forego the claims payment system.
        • On behalf of former Senator Howard Metzenbaum, who is a Hancock policyholder and member of the class, we objected to this settlement on two grounds.
          • First, we thought that the notice to class members was impenetrable in a number of key respects, which would make it much less likely that deserving claimants would, in fact, pursue their claims for redress. Fortunately, the settling parties agreed to amend the notice to clarify and strengthen it to ensure that claimants were fully advised of their rights.
          • Second, and more problematic, the settlement called for an award of $39 million in attorneys' fees.
        • We opposed that aspect of the settlement, but for reasons that go to the heart of this Committee's inquiry.
    • Senate - Committee On The Judiciary - Subcommittee On Administrative Oversight And The Courts