Cuomo widens insurer probe with 6 more subpoenas

New York Attorney General Andrew Cuomo attends a news conference in New York in this June 30, 2010 file photo. REUTERS/Mike Segar

New York Attorney General Andrew Cuomo attends a news conference in New York in this June 30, 2010 file photo.

Credit: Reuters/Mike Segar

NEW YORK | Fri Jul 30, 2010 2:32pm EDT

NEW YORK (Reuters) - New York Attorney General Andrew Cuomo has subpoenaed six more insurers as the state widens a probe into whether life insurance companies have defrauded families of deceased members of the military.

Genworth Financial Inc, Guardian Life of America, AXA SA's MONY Life Insurance Co, New York Life Insurance Co, Northwestern Mutual Life Insurance Co and Unum Group received the subpoenas, Cuomo spokesman Richard Bamberger said on Friday.

Cuomo, who is running for the Democratic nomination for governor of New York, has now subpoenaed at least eight companies. On Thursday, his office said it issued subpoenas to MetLife Inc and Prudential Financial Inc.

The attorney general is probing whether life insurers are defrauding families of deceased military personnel by siphoning millions of dollars of death benefits for themselves.

At issue is whether insurers, rather than pay out lump sums upon the deaths of the policyholders, instead keep money in potentially risky accounts they control, and pay low yields to the survivors.

"It is shocking and plain wrong for these multinational life insurance companies to pocket hundreds of millions in profits that really belong to those who have lost family members," Cuomo said in a statement on Thursday.

The U.S. Department of Veterans Affairs is also conducting a review, Prudential said on Thursday.

Speaking on a Friday conference call, a senior MetLife executive said "our account holders tell us they love" the products in question, which offer better returns than money market accounts.

Genworth spokeswoman Deborah Pont said her company had received a subpoena, and declined further comment.

Guardian spokesman Richard Jones, New York Life spokesman Bill Werfelman, Northwestern Mutual Life spokeswoman Jean Towell and Unum spokesman Jim Sabourin said their respective companies had not received subpoenas, and AXA spokesman Chris Winans said he was unaware of MONY having received one.

(Reporting by Jonathan Stempel and Steve Eder; Editing by Leslie Gevirtz and Steve Orlofsky)

Related Quotes and News

Company
Price
Related News
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (8)
yr2009 wrote:
That’s it Andy, go get them!

Jul 30, 2010 2:11pm EDT  --  Report as abuse
jljamup wrote:
He will be sure to win old n.y is is kind of town. the people love liberals who look after them.because they are not capable of taking care of them self.

Jul 30, 2010 2:31pm EDT  --  Report as abuse
Subaruzi wrote:
If this is what I think it is than what happens is the money goes into an account for the beneficiaries and they get a check book. The benes have access to it just like a checking account. The clients really do like these because it makes the money available but they do not have to think about it. Just another politician using a public office to further his own political ambition. Shameless. He should be the one under investigation.

Jul 30, 2010 3:25pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.
See All Comments »