WASHINGTON BUREAU — A House committee has asked MetLife Inc. to send it detailed information about retained asset accounts by Sept. 2.
The House Oversight and Government Reform Committee has asked for the data in a letter addressed to Robert Henrikson, the chairman of MetLife, New York (NYSE:MET).
RAAs are accounts life insurers use to hold beneficiaries’ benefits until the beneficiaries withdraw the cash using checks, payment cards or other means.
Rep. Edolphus Towns, D-N.Y., chairman of the committee, and Rep. Stephen Lynch, D-Mass., a senior member, suggest in a letter to Henrikson that some beneficiaries may not understand that they have the right to obtain immediate access to the money in RAAs.
“Moreover, these retained asset accounts are essentially low-interest bank accounts that, unlike bank deposits, are not insured by the Federal Deposit Insurance Corporation, although they may be protected by state insurance guaranty funds,” the lawmakers say.
“It appears that MetLife currently earns more than 4% on funds deposited in these retained asset accounts, while some beneficiaries earn 0.5% interest,” the lawmakers say.
The tight deadline included in the letter implies that the oversight panel may hold a hearing on the RAA issue before October, when House members will focus on campaigning.
Towns and Lynch say in their letter that the request for information is part of an investigation by the panel into the life insurance industry’s use of RAA in general and in plans offered to veterans, active-duty member of the armed forces and federal civilian employees.
The lawmakers have asked MetLife to provide documents in 37 different categories, including RAA administration, RAA “checks,” RAA investments, RAA interest rates, and procedures for dealing with dormant RAAs.
The lawmakers also are seeking information on account security.
John Calagna, a spokesman for MetLife, says the company is fully cooperating with the investigation.
MetLife looks look forward to “explaining to the committee all the benefits provided under MetLife’s Total Control Account, including the ability of accountholders to have immediate access to the entire proceeds of their account,” Calagna says.