http://www.reuters.com/article/idUSTRE66S40I20100729NY subpoenas MetLife, Pru on soldier death benefits
By Jonathan Stempel
NEW YORK | Thu Jul 29, 2010 7:26pm EDT
Reuters) - New York's attorney general has subpoenaed MetLife Inc and Prudential Financial Inc as part of a probe into whether life insurers are defrauding families of deceased military personnel by siphoning off millions of dollars of death benefits for themselves.
It is shocking and plain wrong for these multinational life insurance companies to pocket hundreds of millions in profits that really belong to those who have lost family members and have already suffered immensely," the attorney general, Andrew Cuomo, said in a statement.
Cuomo announced the subpoenas of the largest U.S. life insurers on Thursday, one day after the U.S. Department of Veterans Affairs said in a published report that it had begun its own investigation into the issue.
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At issue is whether the insurers, rather than pay out lump sums to military families upon the deaths of policyholders, instead would keep money in potentially risky accounts they controlled, known as retained-asset accounts, while paying out low yields to surviving families.
Cuomo said the insurers reportedly earned upward of 4.8 percent annually on these accounts, but paid families interest as low as 0.5 percent, less than the rates they might find at their local banks. The insurers' accounts, moreover, are not guaranteed by the Federal Deposit Insurance Corp, Cuomo said.
Don't certain industries prove over and over that they need to be overseen and regulated because they will NEVER do the right thing of their own accord?
How about some criminal indictments? Fraud, misappropriation, coversion of profits, mail fraud at the very least?
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