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New York Widens Insurer Probe with Six More Subpoenas

Friday, 30 Jul 2010 04:29 PM

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, Guardian Life of America, AXA SA's MONY Life Insurance, New York Life Insurance, Northwestern Mutual Life Insurance 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 and Prudential Financial.

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 Thursday.

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

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