Met Life, New England merger halted Court order blocks approval in Mass.

August 01, 1996|By BOSTON GLOBE

BOSTON -- A consumer group has won a court order that temporarily blocks Massachusetts regulators from approving the merger of Metropolitan Life Insurance Co. and The New England.

In a lawsuit filed in Suffolk Superior Court, the Cambridge-based Center for Insurance Research charges that the merger plan was misrepresented to policyholders of The New England, that the deal is basically unfair to those policyholders and that Massachusetts Insurance Commissioner Linda Ruthardt has failed to follow proper legal procedures.

The granting of a temporary restraining order means Ruthardt cannot approve the merger right now. The court did not rule on the substance of the lawsuit. A hearing has been set for Aug. 9.

A spokesman for The New England predicted that the court would eventually find that the lawsuit lacks merit. "At some point we will merge with Met Life," said Peter Harrington, vice president of corporate communications for The New England.

The New England is based in Boston; Met Life is headquartered in New York. Last summer, the two insurers announced their plans to merge. The companies hope to win final approval for the merger by the end of August.

In the financial world, the deal has been extremely popular. Together the two companies will have more assets than all but one life insurance company, Prudential Insurance Co. of America. Insurance specialists say the merger is particularly helpful to The New England, which has been hampered by poor investments in real estate.

Policyholders of both insurance companies have already voted in favor of the merger.

Pub Date: 8/01/96

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