Bank Sues Over Allocation Of COLI Funds

The holder of a company-owned life insurance policy is going to court to try to shift assets from a fund that faces significant exposure to investments with high-risk ratings.

Israel Discount Bank of New York, New York, a state-chartered bank that is a unit of Israel Discount Bank Ltd., Tel Aviv, Israel, has filed a suit in a state court in New York that names Metropolitan Life Insurance Company, a unit of MetLife Inc., New York, and BlackRock Inc., New York, as defendants.

IDB says it has lost about $2 million on assets invested in a COLI investment fund managed by BlackRock that has put money in assets with “sub-prime” credit ratings.

MetLife has refused to respond to IDB’s demand that it move the assets in the BlackRock account somewhere else, IDB says in the complaint.