MetLife Subpoenaed by California in Probe of Unpaid Benefits
By Andrew Frye
April 25, 2011
MetLife Inc. (MET), the largest U.S. life insurer, was subpoenaed by California regulators reviewing whether the company cheated policyholders' survivors.
"MetLife failed to pay life insurance policy benefits to named beneficiaries or the state even after learning that an insured had died," California Insurance Commissioner Dave Jones said today in a statement, citing preliminary findings from a state audit on the New York-based company.
Jones and California Controller John Chiang are widening a probe into whether life insurers held funds that were owed to beneficiaries or, in cases when they couldn't be located, to the state. John Hancock, a unit of Toronto-based Manulife Financial Corp. (MFC), agreed last week to restore the full value of more than 6,400 accounts and improve methods to determine of policyholders have died.
The state is reviewing cases when insurance companies depleted policyholder benefits, citing unpaid premiums, rather than forwarding the funds to a designee of the deceased. Jones demanded in the subpoena that MetLife send a representative to a May 23 hearing in Sacramento into the insurer's conduct.
"MetLife did not take steps to determine whether policy owners of dormant accounts are still alive," according to the statement.
Christopher Breslin, a spokesman for MetLife, didn't
immediately return a call seeking comment.
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