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April 27, 2011 at 08:00 PM
WASHINGTON BUREAU – At least 35 states and the District of Columbia have joined in efforts to look at how life insurers determine whether insureds have died and how they go about locating policy beneficiaries.
Two of the states – California and Florida – have scheduled hearings for May on the procedures MetLife Inc., New York (NYSE:MET), is using to track down life insurance beneficiaries and to determine whether policies have lapsed because the insureds have died.
Florida regulators will hold their hearing May 19, and California regulators will hold their hearing May 23.
Florida regulators also have sent a subpoena asking Nationwide Financial Services Inc., Columbus, Ohio, to participate in the Florida hearing, officials say.
Florida’s probe centers around whether some insurers use a Social Security death database to determine whether the owners of annuities have died but fail to use the database to find out whether their life policyholders have died.
California Controller John Chiang, who has announced a 23-state settlement in connection with concerns about unclaimed property practices at a unit of Manulife Financial Corp., Toronto (TSX:MFC), says the investigations began when his office launched an audit in 2008.
Officials in the Chiang’s office have reported in preliminary audit findings that a unit of MetLife may have failed to pay life insurance policy benefits to named beneficiaries or the state after learning that an insured had died.
Chiang says MetLife sold a large number of industrial life policies to working-class people in the 1940s and 1950s.
“The controller’s unclaimed property audit indicates that MetLife did not take steps to determine whether policy owners of dormant accounts are still alive, and if not, pay the beneficiaries, or the state if they cannot be located,” Chiang says in the statement.
