New York State Insurance Department to reassess the legality of Industry practices

The New York State Insurance Department is to question Health and Life Insurance companies about their practices concerning the death benefits provided to beneficiaries. The authority officials stated that policy beneficiaries face issues of delay in payment. The Insurance companies make handsome money by placing policy funds in interest bearing accounts and issuing IOUs to the receivers.

The funds for the beneficiaries are termed as retained asset accounts by the Insurance Companies which are not even guaranteed by the Federal Deposit Insurance Corporation. Bloomberg reported a case where an IOU issued to the beneficiary was rejected twice by the sales person in retail purchases.