Veterans Administration Will Investigate Life Insurance Practices

VA to Investigate Life Insurance Practices: The VA is investigating what may be a legal yet shameful life insurance industry practice of putting veterans' death benefits into corporate accounts instead of making lump sum payments to survivors.  Prudential Financial Inc. and MetLife Inc. are among the companies to be investigated, according to Bloomberg Markets magazine.  Another industry practice to be investigated is the payment of uncompetitive interest rates to survivors.  In 2008, for example, Prudential paid survivors 1 percent interest on their accounts, while it earned a 4.8 percent return on its corporate funds, according to Bloomberg.  Such accounts are not FDIC protected.  House VA Committee Chairman Bob Filner (D-CA) said he was "outraged" that insurance practices appear to result in "corporations retaining the assets in corporate accounts, profiting from the interest, and failing to pass accrued interest to surviving families. VA Washington Weekly July 30, 2010