New York's attorney general said on Thursday he had subpoenaed MetLife Inc and Prudential Financial Inc as part of an investigation into whether life insurers defrauded grieving military families out of hundreds of millions of dollars.
Attorney General Andrew Cuomo said it appeared that rather than pay out automatic lump sums upon the deaths of policyholders, the insurers would put payouts in "retained-asset" accounts in which the interest generated mostly benefited the insurers rather than the families.
"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 and have already suffered immensely," Cuomo said in a statement.
The subpoenas seek data on how and when beneficiaries learn about the terms and conditions of the retained-asset accounts, and data on the difference between interest earned by the insurers and the beneficiaries.
MetLife and Prudential were not immediately available for comment.
