Veterans Affairs, N.Y.'s Cuomo to investigate insurers' death-benefit practices

Sunday, August 1, 2010

After the online publication of this Bloomberg Markets investigation, the Department of Veterans Affairs said Wednesday that it is investigating Prudential's use of retained-asset accounts. Defense Secretary Robert M. Gates said his agency will assist the VA's investigation, and White House spokesman Nick Shapiro said President Obama "supports the VA's immediate investigation" into the "unacceptable" practices.

New York Attorney General Andrew Cuomo began a fraud probe into the use of the accounts. On Thursday, Cuomo subpoenaed MetLife, Prudential Financial and six additional insurers for information about profits on death benefits retained from the families of deceased policyholders, including military personnel.

"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.

-- David Evans

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