When it comes to a life insurance pay out, do you know what is being done with your money?
A few Reno beneficiaries say big insurance companies are being deceptive.
Retained Asset Accounts are a $28 billion industry and until now, insurance companies have been able to slide under the radar.
Here's what is happening: Instead of receiving money when a policy holder dies, a beneficiary receives a checkbook, and the insurance company keeps the money in their own investment fund.
That seems acceptable; if you can take the money out, what is the problem?
Your money is not insured by FDIC through these companies and if one were to go bankrupt, your money would be lost.
Reno Attorney Matthew Sharp is working on a federal appeal after a case between his client Jaime Clark, and MetLife, was dismissed in Reno Federal Court in September. Clark claimed MetLife "breached a contract when it created a $50,000 retained-asset account for her."
U.S. District Judge Larry Hicks dismissed the case, stating Clark had not suffered damages. Sharp says the problem with Judge Hicks ruling is that, "it doesn't go to the next step...essentially allows the insurance company to run a ponzi scheme."
Sharp says insurance companies are "exploiting their power and ability to pay claims and getting away with it. What I'd like to see is the insurance industry be required to provide full disclosure so that the consumer is fully aware how the insurance company is holding their money."
http://www.mynews4.com/story.php?id=32176&n=122
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This is a shocking development, How they managed to get away with it I have no idea. The fact they got away with it only means more companies are going to try it themselves, this is going to end in the US circuit courts, maybe even the Supreme Court unless the Federal Government steps in.
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