Prudential Financial, Inc. and MetLife, Inc., two of U.S largest life insurance companies with their main offices situated in New York City, are currently being investigated for allegedly defrauding military families and others of millions in life-insurance cash.
Six other insurers, Genworth Financial Group, Unum Group, Guardian Life Insurance, Northwestern Mutual Life, MONY Life Insurance and New York Life Insurance Co. are also served for similar allegations.
The Attorney General’s Office alleged that these major players of life insurance have been misleading their beneficiaries through “retained asset accounts”. Specifically, at the current stage of the investigation, “retained asset accounts” served as an alternative to lump sum payments by insurers to grieving families; instead the insurer will invest the sums into interest bearing accounts. The family generally receives a return of 0.5% while insurers receive 4.8%.
Investigations alleged Prudential and MetLife to have misled their beneficiaries to invest into insurer controlled and potentially risky accounts.
The entire life insurance industry remains under investigation.
