Insurers questioned about retained-asset accountsNews added by ProWEB Media on August 2, 2010
Gary Linnell

ProWEB Media

Joined: December 27, 2005

New York Attorney General Andrew Cuomo has subpoenaed Genworth Financial Inc., Unum Group and other insurers in a quickly expanding life insurance fraud probe.

Other companies ordered to submit information include New York Life Co., Northwestern Mutual Life Insurance Co. and Guardian Life Insurance Co. of America.

The Attorney General is investigating profits earned by insurers on death benefits retained on behalf of the families of deceased policyholders that include members of the military.

Cuomo recently announced an investigation into what he termed "secret profits." The investigation follows reviews by the New York State Insurance Department and the U.S. Department of Veteran Affairs.

According to a statement by Cuomo, "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. The insurance industry appears to be hoarding millions that belong to military families whose loved ones have made the ultimate sacrifice."

Prudential Chief Executive Officer John Strangfield said that holding beneficiaries' funds and allowing access on demand helps provide security to clients. "Beneficiaries are vulnerable targets for abusive sales tactics. We believe that the Allied Account takes pressure off beneficiaries to do something with the money -- a situation that may lead to imprudent and expensive investment decisions."
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