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Member, Beacon International Group, Ltd.
WASHINGTON (Bloomberg)—Sen. Richard Shelby, R-Ala., the ranking Republican on the Senate Banking Committee, requested that the panel review the practice of insurers earning income by retaining soldiers' death benefits rather than sending lump-sum payments to survivors.
“It is unclear whether service members and beneficiaries understand the full range of financial choices” offered by the Department of Veterans Affairs' insurance program, Sen. Shelby wrote in a letter Friday to Sen. Christopher Dodd, D-Conn., who heads the Senate panel.
Sen. Shelby joins Rep. Edolphus Towns, D-N.Y., in pressing for a congressional review of life insurers' practices. MetLife Inc. and Prudential Financial Inc., the two largest U.S. life insurers, have been under fire since Bloomberg Markets magazine reported last month that the industry holds about $28 billion in so-called retained-access accounts.
“The Banking Committee should hold a hearing to examine these reports and determine if any unfair practices exist.,” Sen. Shelby wrote. “I have already instructed my staff to begin investigating this issue in preparation for a hearing.”
Copyright 2010 Bloomberg
ALBANY, N.Y. (Bloomberg)—The New York State Insurance Department plans to review the legality of an industry practice that directs death benefits to accounts managed by carriers on behalf of beneficiaries.