Class Sues MetLife Over 'Death Master File'

[The Straight Story]

Class Sues MetLife Over 'Death Master File'

MANHATTAN (CN) - MetLife used a public database of death notices to stop its clients' annuity payments, but ignored the database when it informed the insurer that it must start paying on a policy, shareholders say in a derivative class action.

MetLife exploited the Social Security Administration's Death Master File (DMF) to withhold more than $52 million in life insurance benefits to survivors, in some cases for as long as 40 years, lead plaintiff Jack Fishbaum claims in New York County Court.

"Specifically, MetLife has consulted the DMF assiduously for those clients with annuities to enable the company to stop paying annuity payments at the time of death," the complaint states. "For regular life insurance policies, however, MetLife ignores the DMF so that the company can avoid paying death benefits. MetLife disregarded the DMF for life insurance policies despite touting that beneficiaries would receive benefits upon the death of the insured. This practice enables Met Life to draw the value of a permanent life policy down to the final point of cancellation and continue to collect interest on unclaimed benefit cash In such instances, MetLife also continues to be a 'beneficiary' of the amount with interest collected, and can, over time, allow its requirement to pay benefits at all to basically expire. Thus, MetLife has long used the DMF to promptly stop issuing annuity payments to contract holders who have died, but has ignored the same list to locate family members of deceased policyholders in order to issue payments to a life insurance beneficiary." Fishbaum says the practice has subjected MetLife to state investigations.

"As a result of MetLife's unfair and wrongful practices, the company is now the subject of numerous investigations by state regulators," the complaint states. "Additionally, MetLife's stock price has declined after it was forced to take charges to increase its reserves in connection with the use of the DMF."

http://www.courthousenews.com/2012/02/01/43522.htm

[SharonAnn]

1. Well, they're an insurance company. Without enforcing laws, they're all crooks.

Seriously. I was assigned to two different project with insurance companies.

After those, I told my employer that I wouldn't work with an insurance company again.

Seeing from the inside (IT projects) how they do what they do, made me nauseous. They're incredibly unethical and often doing illegal things, but get away with it if they don't get caught.

Another reason why banks and insurance companies shouldn't be combined. They increase each others criminality.