MetLife Inc.’s board doesn’t have to face oversight claims over the insurer’s practice of downplaying its liabilities by wrongly counting pensioners as dead if they didn’t respond to its letters, instead of consulting official records, a Delaware Chancery Court judge ruled.

The shareholder derivative lawsuit “supports an inference of failure of prudence on the part of the defendants; and a lack of imagination perhaps,” Vice Chancellor Sam Glasscock III wrote Monday.

But “the plaintiffs require too many attenuated inferences to traverse from regulatory guidance and settlements on the part of the company, to bad faith on the part of any director,” Glasscock said.

The case concerned Metlife’s “pension risk transfer” operations, a long-running business line that involves managing pension obligations for employers.

The insurer for decades based its annuity payments on letters to sent to beneficiaries around their 65th and 70th birthdays notifying them of their eligibility. If a pensioner failed to respond, the company marked them down as dead, avoided the payment, and released the money into its general earnings.

That method of determining pension liability persisted even after more accurate tools became available, such as the Social Security Administration’s “master death file.”

The company ultimately acknowledged the errors in December 2017, adjusting its cash reserves downward by more than $500 million. The suit accused its directors of ignoring red flags related to the pension errors by looking the other way despite mounting audits and investigations.

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