Florida's insurance regulator is looking into whether insurers' alleged failure to deliver deceased clients' death benefits promptly may have had an impact on the companies' financial statements and reserves.
“These are questions that have come up over the course of the investigations,” said Kevin McCarty, Florida's insurance commissioner and chairman of the National Association of Insurance Commissioners' task force on life and annuity claim settlement practices.
“So far, the focus has been on the investigations on the claims practices, but when we take a larger look at this, the pivotal question is, "How do you start accounting for these policies, and are they still reserved?'” Mr. McCarty asked. “If they have in their files that the person is dead, do they then release the reserve, and how is that ultimately reflected in the financial statement?”
CURIOUS COMMISSIONERS
“Commissioners will be curious as to what has been reported in the past,” Mr. McCarty added.
“We're not aware of any analysis on this issue,” said Whit Cornman, a spokesman for the American Council of Life Insurers.
Claim settlements practices have been in the spotlight after a three-year investigation on behalf of 35 states led last month to a $20 million settlement between California and John Hancock Life Insurance Co.
The investigation, which examined the practices of 21 insurers, attempted to determine whether the companies were complying with state unclaimed-property laws when distributing death benefits.
California will hold a hearing May 23 to look into Metropolitan Life Insurance Co.'s practices and has subpoenaed the insurer to have representatives appear that day. Meanwhile, Florida has subpoenaed Nationwide Life Insurance Co. and MetLife, and Connecticut's insurance department recently an-nounced that it has started its own inquiry.
E-mail Darla Mercado at [email protected].
