NU Online News Service, July 18, 12:04 p.m.EST

A controversial auto buying program promoted by GM and MetLifehas been fully vetted and is in compliance with insuranceregulations, MetLife and state regulators say.

GM launched a program earlier this month to include auto insurancewritten through MetLife with the purchase of a new automobile at noextra charge.

In an e-mail response to questions from NU Online NewsService, David Hammarstrom, a MetLife spokesman, says theprogram "has been fully vetted and approved in advance byappropriate insurance-regulatory bodies" in Washington andOregon.

He says the company has long been noted as one that utilizes"multi-channel distribution" to sell insurance and that the"innovative program was brought to us, and is brokered by, anindependent insurance agency." MetLife did not identify theagency.

The insurance for the program is paid for by GM at no additionalcost to the consumer. To get the insurance, Hammarstrom says thecustomer must have a valid driver's license; the vehicle must beregistered in the participating state; and the vehicle cannot beused for commercial, fleet, or livery use.

Customers can choose to:

• Take the basic policy and not include it on theirexisting policies;

• Continue with their existing policy and add the newcar to the policy using the GM policy as "additional coverage fromthis program"; or

• Decline the coverage altogether.

Customers are contacted by a MetLife representative prior toissuing the policy, or they can call the carrier to speak to alicensed representative to discuss insurance-related issues.

The pilot program will run from July 6 to Sept. 6 and covers thepurchase or lease of new 2010, 2011 or 2012 GM vehicles atparticipating dealerships.

The program has been greeted with alarm by independent agents inboth states. The Professional Insurance Agents Western Alliancelast week said it is protesting the program, questioning its legality.

In a letter, the National Association of Professional InsuranceAgents, along with the presidents of PIA's in Washington andOregon, raised questions about the coverage extended to customersand how it affects other insurance policies they may own.

"Distributing sophisticated insurance products through cardealers erodes [MetLife's] brand and devalues the independentagency system," the letter says. "Insurance is not a commodity likefloor mats."

The letter was signed by Fred Thomas, president PIA National,Chris Peterson, president PIA Oregon, and Trevor Campbell,president PIA Washington.

In interviews with insurance department spokespersons fromOregon and Washington, both said the departments have receivednumerous complaints and questions from independent agents. Bothdepartments said the programs were fully reviewed and determined tobe legal.

Sandi Peck, a spokeswoman for the Washington State Office of theInsurance Commissioner, says the program is considered a grouppolicy with GM as the holder of the master contract, but the autocompany is not "acting as an independent producer."

"This is a new innovative program for all of us," sheadmits.

For its part, the insurance division of the Oregon Department ofConsumer and Business Services is issuing a letter designed toanswer questions that individuals have about theprogram.

The letter states that the MetLife program is not a form ofrebate because the insurance was already purchased by GM and doesnot promote the sale of an insurance policy. It notes that GMemployees are not involved in the insurance program or compensatedfor it.

As far as concerns expressed about consumers with umbrellapolicies, the department says consumers need to discuss this withtheir producer so "a solution can be found."