Shelby Seeks Senate Hearing on How Insurors Handle Military Claims Payment

By Hugh Son
Bloomberg News
August 13, 2010

Richard Shelby, the ranking Republican on the Senate Banking Committee, requested the panel review the practice of insurers earning income by retaining soldiers' death benefits rather than sending lump sum payments to survivors.

"It is unclear whether service members and beneficiaries understand the full range of financial choices" offered by the Department of Veterans Affairs' insurance program, Alabama's Shelby wrote in a letter today to Christopher Dodd, the Connecticut Democrat who heads the Senate panel.

Shelby joins Representative Edolphus Towns, Democrat of New York, in pressing for a congressional review of life insurers' practices. MetLife Inc. and Prudential Financial Inc., the two largest U.S. life insurers, have been under fire since Bloomberg Markets magazine reported last month that the industry holds about $28 billion in so-called retained-access accounts.

"The Banking Committee should hold a hearing to examine these reports and determine if any unfair practices exist.," Shelby wrote. "I have already instructed my staff to begin investigating this issue in preparation for a hearing. "

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