Probes over the way it’s handled life insurance and annuity contract payments. Insurance giant MetLife Inc. is facing state probes over the way it’s handled life insurance and annuity contract payments after the holder of said instruments passed away. lawsuit title
In California, MetLife has been subpoenaed by the State Insurance Commissioner and State Controller over its payment of death benefits for so-called “industrial policies.” legal proceeding later this month, according to a joint press release issued by the offices.
Industrial policies were sold mostly to working class people in the 1940s and 1950s. According to early findings from an audit conducted by the State Controller that started in 2008, MetLife failed to pay life insurance policy benefits to named beneficiaries or the state even after learning that an insured had died. The regulators said MetLife learned of the deaths of insureds through a database prepared by the Social Security Administration called “Death Master,” which lists all Americans who die.
earnings According to a press release from the California Insurance Commissioner and the state Controller’s office, in some of these cases, MetLife continued making premium payments from the policy holder’s account until the cash reserves were used up, and then canceled the contract.
The insurance industry was in compliance with state unclaimed property laws
Just last week, the California Insurance Commissioner announced a landmark settlement with insurer John Hancock following a multiyear investigation aimed at determining whether the insurance industry was in compliance with state unclaimed property laws. The commissioner and controller believe that these practices are not isolated, but are systemic in the insurance industry, the offices’ press release said.
In Florida, MetLife has also been subpoenaed to attend a public hearing next month that will look into whether some insurers may use the same Social Security database to learn of the death of annuity owners. According to a report in The Wall Street Journal, Nationwide Financial Services Inc. has been subpoenaed to testify at the same hearing. The Florida probe is aimed at investigating whether insurers are avoiding paying death benefits to beneficiaries.
According to the Journal, regulators in 35 states are investigating about a dozen big insurers over similar allegations.