4 Life Insurance Companies Fined $200K In Asset Case
ST. PAUL, Minn. (WCCO) – Four Minnesota life insurance companies have been fined $200,000 each by the Minnesota Department of Commerce for failing to provide all necessary information to consumers when a loved one has died.
Prudential, MetLife, John Hancock and ING are all involved in the case. The allegations are that they inappropriately enrolled customers in retained assets accounts when filing life insurance claims when instead they should’ve chosen lump sum cash payments after a death in the family.
The Department of Commerce has ordered each company to pay a civil penalty of $200,000 and modify its claims processes, change its practices and re-establish cash payouts as the default option for Minnesota customers.
Minnesota law states that insurance companies are required to provide clear instructions for obtaining payments under life insurance policies. That includes the option to get a cash benefit in a lump sum. Many customers of the four companies were convinced to enroll in asset accounts that allowed the company to hold onto those life benefits that the customer can draw down over time.
Many customers chose that option not knowing they were a beneficiary to a loved one who died. If you think you might be a victim in this case or work with any of the four companies, contact the Minnesota Department of Commerce Consumer Response Team at (651) 296-2488.