Are the life insurance companies ripping off the families of soldiers killed in battle? That is the question Attorney General Andrew Cuomo is looking to answer.
The New York Attorney General's office has issued subpoenas to two life insurance companies to try to learn if the firms are "defrauding" military families.
“The insurance industry appears to be hoarding millions that belong to military families whose loved ones have made the ultimate sacrifice for our country,” said Cuomo.
The AG claims that Prudential and MetLife placed lump-sum payouts from the life insurance policies of fallen soldiers in low interest-bearing accounts. Families received just 0.5 percent interest on the funds -- while the insurance companies earned nearly ten times that amount. And Cuomo said the insurance companies may not have told families that some of the funds were in risky accounts that are not FDIC insured.
Cuomo said most military families were also never told they have one year to deposit death benefits in an insured Roth IRA. A Roth IRA can provide tax-free investment gains for life.
A spokesperson for MetLife said the company will “cooperate fully” with the Attorney General’s investigation. Bob DeFillippo, the Chief Communications Officer at Prudential had no comment.
Both companies said they have not yet received the subpoenas.
“It is shocking and plain wrong... to pocket hundreds of millions in profits that really belong to those who have lost family and already suffered immensely,” said Cuomo.