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<b>Cuomo subpoenas AIG in benefits probe</b>

WASHINGTON (Bloomberg) - New York Attorney General Andrew Cuomo subpoenaed American International Group Inc. (AIG) as part of a fraud investigation focusing on life insurers' retention of death benefits, a spokesman for his office said.<br><br>Lincoln National Corp., Aetna Inc., CNO Financial Group Inc. and Principal Financial Group Inc. also were ordered to turn over records, said Richard Bamberger, the spokesman.<br><br>Cuomo is widening a probe after saying on July 29 that he subpoenaed MetLife Inc. and Prudential Financial Inc., the two largest US life insurers. Bloomberg Markets magazine reported on July 28 that more than 100 carriers earn investment income on $28 billion owed to life-insurance beneficiaries. The companies hold money in so-called retained-asset accounts, which include a "checkbook" for clients to access their funds

WASHINGTON (Bloomberg) - New York Attorney General Andrew Cuomo subpoenaed American International Group Inc. (AIG) as part of a fraud investigation focusing on life insurers' retention of death benefits, a spokesman for his office said.Lincoln National Corp., Aetna Inc., CNO Financial Group Inc. and Principal Financial Group Inc. also were ordered to turn over records, said Richard Bamberger, the spokesman.Cuomo is widening a probe after saying on July 29 that he subpoenaed MetLife Inc. and Prudential Financial Inc., the two largest US life insurers. Bloomberg Markets magazine reported on July 28 that more than 100 carriers earn investment income on $28 billion owed to life-insurance beneficiaries. The companies hold money in so-called retained-asset accounts, which include a "checkbook" for clients to access their funds"The substantial interest earned on these accounts mostly benefit and enrich the insurers at the expense of the families to whom the money really belongs," Cuomo said in a statement last month. "Beneficiaries are not adequately informed by the insurers of the details of these accounts including the fact that the insurers are making huge profits at the expense of the grieving family."AIG, the bailed-out insurer, said it will co-operate with Cuomo, as did Hartford, Connecticut-based Aetna and Carmel, Indiana-based CNO."Aetna believes that its chequebook programme provides a valuable service to our beneficiaries," said Cynthia Michener, a spokeswoman for the company. Employers sponsoring group life benefits programmes through Aetna "appreciate the convenience, immediate access to funds, and additional interest that the chequebook programme provides".Life insurers say the accounts provide beneficiaries with access to their funds while giving mourners time to decide what to do with the cash.The accounts provide "interest income that compares favorably with many other on-demand deposits", the American Council of Life Insurers, an industry lobby group, said this month in a statement.Principal's clients with the accounts are told they have "complete access to those funds", the Des Moines, Iowa-based insurer said today in a statement."Our representatives also explain to the beneficiary that they can write a draft for the full amount and deposit it into their own personal bank account at any time."AIG "will assist with Mr. Cuomo's examination, as is our standard practice," said Mark Herr, a spokesman for the New York-based insurer. CNO, previously known as Conseco Inc., "will, in fact, respond to the request," said Tony Zehnder, spokesman for the insurer.

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Published February 10, 2011 at 2:37 am (Updated February 10, 2011 at 2:37 am)

<b>Cuomo subpoenas AIG in benefits probe</b>

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