Minnesota regulators fined four big life insurance companies $200,000 apiece after the Minnesota Department of Commerce said they improperly enrolled beneficiaries in company-run accounts instead of giving them the option to take lump-sum payments, Bizjournals.com reports.
The Star Tribune reports that the companies — Prudential, John Hancock, MetLife and ING — didn’t admit wrongdoing but agreed to the settlement penalties. They’re also being instructed to change their claims forms to make cash payouts the default option for customers
Commerce Commissioner Mike Rothman said thousands of Minnesotans were confused by paperwork, which kept benefits in special accounts run by the insurance companies. The companies then treated the accounts as a bank would — investing it and keeping the profits.
