Life insurance giant, Metlife, Inc., is facing some scrutiny by California regulators. A subpoena was just issued to determine if <"http://www.yourlawyer.com/topics/overview/MetLife-Life-Insurance-Lawsuit-Policy-Death-Benefits-Lawyer">Metlife cheated policyholdersâ€™ survivors on death benefits, said Bloomberg News.
â€œMetLife failed to pay life insurance policy benefits to named beneficiaries or the state even after learning that an insured had died,â€ said California Insurance Commissioner, Dave Jones, in a statement, quoted Bloomberg News. Jones cited early findings from a state audit. Metlife is based in New York.
Now, Jones, in collaboration with the California Controller John Chiang, are expanding their probe to determine if insurers were holding funds meant to be paid to beneficiaries or the state (in cases in which beneficiaries could not be found), wrote Bloomberg News. As a matter-of-fact, John Hancock, a unit of Manulife Financial Corp., just agreed to return the complete value of over 6,400 accounts and improve how it determines if its policyholders died, said Bloomberg News.
The state is also looking into cases in which insurers depleted policyholder benefits, claiming unpaid premiums instead of sending funds to the deceasedâ€™s designee, explained Bloomberg News. Jones has since mandated in the subpoena that a MetLife representative be present at a May 23 hearing in Sacramento into the insurerâ€™s conduct.
The hearing, said The Wall Street Journal, scheduled for late May, has been set to determine if MetLife did or did not contact beneficiaries to pay life insurance benefits in those cases in which it knew the insured was deceased, but a claim had not been filed.
â€œMetLife did not take steps to determine whether policy owners of dormant accounts are still alive,â€ according to the statement, quoted Bloomberg News, which noted that a call seeking comment from Christopher Breslin, a spokesman for MetLife, was not immediately returned.
Authorities in 35 states continue to look into some two dozen life insurers that did not appropriately make determinations about a policyholderâ€™s status and did not correctly turn the related unclaimed funds to the state, said the Journal.
According to the most recent assertions, the California controller and insurance commissioner said, in a joint news release. that they “are responding to preliminary findings” from an audit of the insurer “indicating that for two decades, MetLife failed to pay life-insurance policy benefits to named beneficiaries or the State even after learning that an insured had died,” quoted the Journal. This recent subpoena is the second served in one week to Metlife on this issue.
The news release discussed how Metlife sold policies to the working-class in the 1940s and 1950s; the policies were valued at about $1.2 billion, said the Journal. The audit initially found that Metlife “did not take steps to determine whether policy owners of dormant accounts are still alive, and if not, pay the beneficiaries, or the State if they cannot be located,â€ quoted the Journal.
The authorities also assert that the insurer, in at least one case, used cash from one policyholderâ€™s account to pay itself the premium before it â€œcancelled the contract,â€ only after the funds were emptied, quoted the Journal.