California regulators subpoenaed MetLife Inc and plan a hearing on the company’s practices involving the payment of benefits after learning of an insured’s death.
Insurance Commissioner Dave Jones and State Controller John Chiang on Monday said they are responding to audit findings indicating that MetLife failed to pay life insurance policy benefits even after learning that an insured had died.
The subpoena comes after Chiang announced a settlement with insurer John Hancock Life Insurance Co last week involving similar issues.
MetLife spokesman John Calagna said the company would fully cooperate with regulators.
“MetLife’s first priority is to keep its promises to its policyholders,” Calagna said, adding that the company made payments in excess of USD 11 billion to beneficiaries in 2010.
MetLife has an estimated USD 1.2 billion worth of so-called Industrial Policies, sold to working-class people in the 1940s and 1950s, the regulators said.
The audit indicates that Metlife did not take steps to determine whether policy owners of dormant accounts are still alive, and if not, pay the beneficiaries — or the state if they cannot be located, the regulators said.
“The thrust of this hearing is to determine whether MetLife, one of the largest life insurers and issuers of annuities in the United States, engaged in unfair practices regarding the payment of life insurance claims to beneficiaries,” Jones said in a statement.
Calagna said MetLife has been proactive in identifying policy owners, establishing a master database in recent years.
In its settlement, John Hancock agreed to restore the full value of more than 6,400 impacted accounts dating back to 1992, and to better identify deceased policy holders, among other provisions.
The MetLife hearing is scheduled for May 23 in Sacramento, California.