NY Attorney General Subpoenas 9 Life Insurers

New York Attorney General Eric Schneiderman sent out subpoenas to nine leading life insurance companies last month. A source close to the matter told Reuters on Tuesday that the subpoenas sent addressed the companies’ practices in identifying and paying out policies to deceased customers.

Companies Not Identifying Deceased Policyholders

In a probe similar to that conducted by California Insurance Commissioner Dave Jones in May, Schneiderman is investigating nine major insurance companies that are being accused of not doing enough to locate beneficiaries of policyholders after they’ve died.

His office is seeking information about unclaimed policy proceeds that should have either gone to the beneficiaries or been turned over to the state. The belief is that companies failed to seek beneficiaries on purpose to instead hold the money in retained asset accounts that grow interest over time.

The companies sent subpoenas include AXA SA, Genworth Financial Inc., Manulife Financial Corp., TIAA-CREF, Guardian Life Insurance Co. of America and Massachusetts Mutual Life Insurance Co. Three of the companies included, MetLife Inc., Prudential Financial Inc. and New York Life Insurance Co., have also been subpoenaed by Jones, said the source who wanted to remain anonymous.

Insurers Deny Wrongdoing but Plan to Cooperate

A spokesman for Guardian told Reuters that the company is reviewing the subpoena and intends to “cooperate fully with the Attorney General.”

TIAA-CREF also plans to cooperate but told Reuters, “We believe our processes are compliant with all relevant regulations and serve the best interests of our participants.”

A Genworth spokesman told The Wall Street Journal that it also believes it has “compliant and robust practices to determine when claim payments are due and owing, and to adhere to state unclaimed property requirements and regulations.”

The New York State Insurance Department announced on Tuesday that all life insurers licensed to do business in the state will have to start using an official government death list to identify when policyholders have died. It will also list when death benefits are due to their beneficiaries.