NY Attorney General announces probe of life insurance industry

NEW YORK (AP) July 29, 2010 | State Attorney General Andrew Cuomo said Thursday that he had opened a fraud investigation into how life insurers pay out benefits after policyholders die.

He said his office served subpoenas on Prudential Financial, Inc. and MetLife, Inc. as part of the probe, seeking information on life insurance policies.

Cuomo, a candidate for governor, said his office is investigating the practice of some insurers that retain life insurance beneficiaries' funds in company-controlled accounts, instead of paying out lump sums. He said the companies are apparently earning high rates of interest from the accounts, while paying out substantially lower yields to...