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N.Y. Issues More Subpoenas in RAA Probe

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WASHINGTON–The New York Attorney General’s office has widened its investigation of retained asset accounts (RAAs) to include several more insurers.

The office has subpoenaed American International Group Inc., New York Principal Financial Group Inc. Aetna Inc., Lincoln National Corp. and CNO, formerly Conseco.

They were added to a group of insurers previously subpoenaed that include MetLife Inc. and Prudential Financial Inc.

Cuomo is also seeking RAA data from Unum Group Corp., Genworth Financial Inc., New York Life Insurance Co., Guardian Life Insurance Co. of America and an insurer acquired by France’s AXA Group.

Among the issues that Andrew Cuomo, New York’s Attorney General, is looking into are the interest rates paid on the accounts and whether adequate disclosure was made to beneficiaries of these policies about their alternatives to deposit the funds.

Cuomo’s office says it also will look into whether state guaranty funds have authority to guarantee payments of these accounts.

The National Association of Insurance Commissioners issued a consumer alert last Sunday advising consumers that they can look for alternative places offering higher interest to deposit the funds received from life insurance payouts. It also pointed out the drafts provided by insurers for withdrawals from the retained asset accounts may not be the same as bank checks.

Other RAA probes underway include investigations by the Veterans Administration, the Department of Defense, the Senate Banking Committee and the House Oversight and Government Reform Committee.

Sen. Charles Schumer, D-N.Y., and Rep. Debbie Halvorsen, D-Ill., have announced plans to introduce legislation that would set new rules for the accounts.