California officials grill MetLife over alleged failure to pay death benefits

State Controller John Chiang and Insurance Commissioner Dave Jones ask whether the life insurer is boosting profits by delaying or failing to pay death benefits quickly enough to heirs or to search aggressively for the beneficiaries.

By Marc Lifsher,
Los Angeles Times
May 24, 2011

Reporting from Sacramento

California officials, setting their sights on life insurance companies, want to know whether executives are boosting profits by delaying or failing to pay death benefits quickly enough to heirs or to search aggressively for the beneficiaries.

Unpaid life insurance benefits nationwide exceed $1 billion, according to the National Assn. of Insurance Commissioners. It's not known how much of that involves California policies.

"I am concerned that the insurance industry is not holding up its end of the sacred bargain it stuck with its clients when it issued life insurance policies in the first place," state Controller John Chiang said at a hearing Monday.

Chiang and Insurance Commissioner Dave Jones held an unusual investigative hearing aimed mainly at MetLife Inc. managers, who testified under oath. The hearing, similar to one last week in Florida, is part of a coordinated multistate probe.

(More here.)