Probe of insurers widens to include financial gain

Florida's insurance cop is looking into whether insurers' alleged failure to deliver deceased clients' death benefits promptly may have boosted the companies' financials
AUG 05, 2011
Florida's insurance regulator is looking into whether insurers' alleged failure to deliver deceased clients' death benefits promptly may have had an impact on the companies' financial statements and reserves. “These are questions that have come up over the course of the investigations,” said Kevin McCarty, Florida's insurance commissioner and chairman of the National Association of Insurance Commissioners' task force on life and annuity claim settlement practices. “So far, the focus has been on the investigations on the claims practices, but when we take a larger look at this, the pivotal question is, "How do you start accounting for these policies, and are they still reserved?'” Mr. McCarty asked. “If they have in their files that the person is dead, do they then release the reserve, and how is that ultimately reflected in the financial statement?”

CURIOUS COMMISSIONERS

“Commissioners will be curious as to what has been reported in the past,” Mr. McCarty added. “We're not aware of any analysis on this issue,” said Whit Cornman, a spokesman for the American Council of Life Insurers. Claim settlements practices have been in the spotlight after a three-year investigation on behalf of 35 states led last month to a $20 million settlement between California and John Hancock Life Insurance Co. The investigation, which examined the practices of 21 insurers, attempted to determine whether the companies were complying with state unclaimed-property laws when distributing death benefits. California will hold a hearing May 23 to look into Metropolitan Life Insurance Co.'s practices and has subpoenaed the insurer to have representatives appear that day. Meanwhile, Florida has subpoenaed Nationwide Life Insurance Co. and MetLife, and Connecticut's insurance department recently an-nounced that it has started its own inquiry. E-mail Darla Mercado at [email protected].

Latest News

Advisor moves: Raymond James lands $700M Truist duo in Florida
Advisor moves: Raymond James lands $700M Truist duo in Florida

&Partners has also added a $357 million Texas family practice, while Janney recruits a $250 million Edward Jones advisor in Miami

Wirehouse moves: JPMorgan taps Merrill veteran for Southeast role as BofA beefs up OCIO team
Wirehouse moves: JPMorgan taps Merrill veteran for Southeast role as BofA beefs up OCIO team

Linda Patel will lead J.P. Morgan Advisors in Florida and Georgia as Bank of America adds nonprofit specialists in New York

Colorado advisor loaded up elderly clients with risky Interval funds: regulator
Colorado advisor loaded up elderly clients with risky Interval funds: regulator

Interval funds and other semi-liquid or illiquid products are typically two to three times more expensive than plain vanilla stock or bond mutual funds or exchange-traded funds.

Investor alleges alkaline water startup hid sales data in white text
Investor alleges alkaline water startup hid sales data in white text

The royalty statements looked normal - until someone checked the electronic files.

SEC alleges fake hedge fund forged seals to steal $130M
SEC alleges fake hedge fund forged seals to steal $130M

They allegedly fabricated SEC certificates to dupe investors.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor