August 19, 2010 / 4:36 PM / 9 years ago

Cuomo subpoenas 5 more insurers in benefits probe

NEW YORK (Reuters) - New York Attorney General Andrew Cuomo has subpoenaed five more insurers in a widening probe into whether the industry has defrauded families of deceased members of the military.

New York Attorney General Andrew Cuomo during a news conference, June 30, 2010. REUTERS/Mike Segar

The latest subpoenas were issued to Aetna Inc, American International Group Inc, CNO Financial Group Inc, Lincoln National Corp and Principal Financial Group Inc, Cuomo spokesman Richard Bamberger said on Thursday.

Cuomo has subpoenaed at least 13 companies in a widening probe into whether insurers have been siphoning for themselves millions of dollars of death benefits that were intended for families of deceased military personnel.

At issue is whether insurers, rather than pay out lump sums upon the deaths of the policyholders, instead move money into potentially risky “retained asset accounts” that they control, and then pay out low single-digit yields to survivors.

The U.S. Department of Veterans Affairs, the Federal Deposit Insurance Corp and the National Association of Insurance Commissioners are among other agencies and groups that have been reviewing the accounts.

Aetna spokeswoman Cynthia Michener said that insurer will cooperate with its subpoena, and that its accounts provide customers with “immediate access” to their funds. Principal spokeswoman Sonja Sorrel declined to comment on its subpoena, but said account holders have “complete access” to their money.

AIG spokesman Mark Herr said that insurer will cooperate with the attorney general. CNO spokesman Tony Zehnder and Lincoln spokeswoman Laurel O’Brien did not return requests for comment.

Aetna is based in Hartford, Connecticut; AIG in New York; CNO in Carmel, Indiana; Lincoln in Radnor, Pennsylvania; and Principal in Des Moines, Iowa. CNO was once known as Conseco.

Other insurers that Cuomo has subpoenaed in the probe are Genworth Financial Inc, Guardian Life of America, MetLife Inc, AXA SA’s MONY Life Insurance Co, New York Life Insurance Co, Northwestern Mutual Life Insurance Co, Prudential Financial Inc and Unum Group.

Cuomo, a Democrat, is the front-runner in November’s election to become New York’s next governor.

Reporting by Jonathan Stempel; editing by John Wallace, Robert MacMillan and Andre Grenon

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