The insurance company American International Group, bailed out for $182.3 billion in 2008, will pay between $25 and $30 million to California life insurance annuity policy beneficiaries and $11 million in settlement in response to allegations that the company failed to pay death benefits to beneficiaries once its policyholders passed away. Among the allegations were claims that AIG failed to check Social Security records for the death of their policyholders; failed to follow-up with the beneficiaries after the death of policyholders; and failing to turn proceeds over to the state in case of a missing beneficiary. These payments mark a victory for consumer protection and advocacy in the insurance business, but individuals should remain vigilant when shopping for and purchasing insurance policies.
In other recent news, AIG is under consideration by the Financial Stability Oversight Council to be labeled “a potential risk to the financial system.” If this were to happen, AIG would be the first institution that is not a bank to be classified in this way. As U.S. oversight increases after the losses and bailouts of the past few years, The Federal Reserve will play a larger role in supervising and regulating capital and liquidity levels and requirements.
The Evans Law Firm litigates on behalf of victims of annuities fraud and elder financial abuse in California. If you or a family member was sold a deferred annuity from American Equity and live in California, please contact the Evans Law Firm at 415-441-8669 or e-mail firstname.lastname@example.org.