California subpoenaed MetLife, the largest U.S. life insurance company, to testify at a public hearing on May 23 about how it handles unclaimed assets that belong to beneficiaries.
The hearing mirrored a situation that MetLife found itself in last Thursday, when it appeared before Florida Insurance Commissioner Kevin McCarty to answer questions on the same issue. (Here's more on the Florida life insurance hearing.) Today's investigative hearing in Sacramento before California Insurance Commissioner Dave Jones and State Controller John Chiang promised to be even rougher.
Later in the day, California also announced market conduct examinations of 10 large life insurance companies for failure to pay life insurance benefits to beneficiaries or the state after learning of an insured's death. MetLife, John Hancock Insurance, Prudential Insurance, Nationwide Insurance, The Hartford, Sun Life Financial, New York Life Insurance Co., Lincoln National Life Insurance Co., Aegon Group (which includes Transamerica) and Pacific Life Insurance Co. are under investigation.
Hundreds of millions owed in life insurance benefits
Jones says he has already uncovered evidence that for two decades MetLife failed to pay benefits to beneficiaries or the state after learning that an insured had died. (Here's more on why your life insurance company doesn't care if you're dead.)
During the hearing, California officials quoted academics who said that hundreds of millions of dollars in life insurance go unclaimed each year for one simple reason: The beneficiaries don't know the money exists.
Among the possible violations of California law listed at the hearing were:
Unfair claims settlement practices.
Failure to “escheat,” or turn over money to the state, when beneficiaries could not be found.
Failure to adequately control and monitor dormant retained asset accounts, which insurers use to pool benefits that haven't yet been collected.
Paying themselves
“Do (insurers) use cash values to pay themselves premiums after the death of the insured?” California regulators asked in a PowerPoint presentation just prior to the testimony of MetLife, the sole witness in the hearing.
The insurer was expected to acknowledge - as it did in Florida - that it didn't use the “Death Master” file, a Social Security database of people who've died, until 2007, when it began matching the list against its customers' policies. The company has said that it hadn't used the database on a regular basis until the end of last year. The Death Master file has been in existence since the late 1980s.
However, MetLife spokespeople have denied they did anything illegal.
“Our priority is to pay insurance benefits to those who are entitled to them,” said spokesperson Chris Breslin in a statement prior to the hearing. “When beneficiaries cannot be located, we turn those benefits over to the state.”
A small percentage
Using the Death Master file during 2007, MetLife turned up $51 million in unclaimed assets that went to beneficiaries and another $32 million that went to the state.
While that amount may seem large, it is less than 0.2 percent of the $44 billion in death benefits paid on individual life insurance policies over the same period, which dates back to the 1950s.
“Our experience … has shown us that over 99 percent of life insurance claims proceeds are paid as a result of routine notification and claim submission processes,” said Breslin.
$1 billion in life insurance unclaimed
At the Florida hearing on May 19, McCarty said he estimated that life insurers may owe beneficiaries and the 50 states more than $1 billion in unclaimed assets - money that is sitting in the insurers' retained asset accounts, which currently hold more than $28 billion, according to California officials.
A McCarty spokesman said the $1 billion figure came from Verus Financial LLC, a Connecticut firm that has been hired by 35 states to find unclaimed assets for state treasuries, and from discussions with other regulators.
However, even $1 billion is not large by life insurance standards. At of the end of 2010, life insurers' assets totaled about $5.3 trillion, according to Steven Weisbart, a vice president of the Insurance Information Institute.
“Total death benefits paid over the past 20 years are about $600 billion,” says Weisbart. “In relation to that, $1 billion is 1/6 of 1 percent, or 0.17 percent.”
Canadian life insurer Manulife, which owns U.S.-based John Hancock, has already settled with both Florida and California and agreed to change its payment practices in both states.
The original article can be found at Insure.com:
Read more: http://www.foxbusiness.com/personal-finance/2011/05/24/california-investigates-10-life-insurance-companies-lack-payments-beneficiaries/#ixzz1NNS9gA3t
Wednesday, 25 May 2011
Des Moines to self-insure for city health coverage
Des Moines is returning to a self-insurance system for employee health plans, a move city officials hope will eventually save taxpayers $1 million or more each year.
The City Council approved the switch during its meeting Monday night.
City administrators said it would help control rising health insurance costs, which currently run about $26 million annually.
The Des Moines Register reported Tuesday that if projected savings arrive, the move to self-insurance could become a key part of broader efforts to curb operating costs. Des Moines faces major revenue declines due to lower property valuations. The Legislature also is considering a proposal to slash commercial property tax rates by 40 percent.
Salary and benefits for the city's full-time workers account for about 60 percent of $160 million in general fund spending.
"I hope we stay self-insured," City Councilwoman Christine Hensley said. "I think the time is right for us to go forward with that. I think there have been some changes made."
Des Moines was self-insured before 2003, when the city started to buy private insurance through Wellmark Blue Cross and Blue Shield of Iowa.
The Register said changes in stop-gap, or excessive loss, insurance are among the biggest differences between now and 2003. Then, the city paid the first $300,000 of an individual claim before secondary insurance covered the cost. City officials said that would translate into $500,000 or more for taxpayers.
Multiple large claims helped drive the city's decision to end the self-insurance program. Under the new plan, the city's stop gap insurance will kick in on claims that exceed $125,000, lowering the risk to taxpayers.
Deputy City Manager Allen McKinley said savings in the first year of the new system are expected to be minimal because the time will be spent building reserves required to deal with fluctuations in claims. Significant savings could come in fiscal 2013 once the reserves -- equivalent to about 25 percent of annual claims -- are established.
"Conservatively speaking, we anticipate it being more than $1 million," he said.
City officials estimate health insurance cost would increase between $2 million and $3 million a year had they continued to have private insurance.
The new plan will take effect on July 1 and run through June 30, 2012. Officials said employees would see no change in benefits, health plans or provider networks.
Wellmark will continue to administer the city's employee health insurance claims.
The City Council approved the switch during its meeting Monday night.
City administrators said it would help control rising health insurance costs, which currently run about $26 million annually.
The Des Moines Register reported Tuesday that if projected savings arrive, the move to self-insurance could become a key part of broader efforts to curb operating costs. Des Moines faces major revenue declines due to lower property valuations. The Legislature also is considering a proposal to slash commercial property tax rates by 40 percent.
Salary and benefits for the city's full-time workers account for about 60 percent of $160 million in general fund spending.
"I hope we stay self-insured," City Councilwoman Christine Hensley said. "I think the time is right for us to go forward with that. I think there have been some changes made."
Des Moines was self-insured before 2003, when the city started to buy private insurance through Wellmark Blue Cross and Blue Shield of Iowa.
The Register said changes in stop-gap, or excessive loss, insurance are among the biggest differences between now and 2003. Then, the city paid the first $300,000 of an individual claim before secondary insurance covered the cost. City officials said that would translate into $500,000 or more for taxpayers.
Multiple large claims helped drive the city's decision to end the self-insurance program. Under the new plan, the city's stop gap insurance will kick in on claims that exceed $125,000, lowering the risk to taxpayers.
Deputy City Manager Allen McKinley said savings in the first year of the new system are expected to be minimal because the time will be spent building reserves required to deal with fluctuations in claims. Significant savings could come in fiscal 2013 once the reserves -- equivalent to about 25 percent of annual claims -- are established.
"Conservatively speaking, we anticipate it being more than $1 million," he said.
City officials estimate health insurance cost would increase between $2 million and $3 million a year had they continued to have private insurance.
The new plan will take effect on July 1 and run through June 30, 2012. Officials said employees would see no change in benefits, health plans or provider networks.
Wellmark will continue to administer the city's employee health insurance claims.
Friday, 13 May 2011
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Wednesday, 11 May 2011
he Sky Is Falling: Judgment Day Is May 21, 2011
Most people have heard the “theory” that the world is going to end in 2012 according to the Mayan calendar, but just recently billboards have started to pop in throughout North Carolina and across the United States revealing the world’s last day is specifically going to be on May 21, 2011, based on the Hebrew Calendar.
According to digtiad.com, a broadcast ministry known as Family Radio located in Oakland, California have come up with the new Judgment Day date. The founder, Harold Camping, is claiming one can know the date of the creation of the world, Noah’s flood and more events that have been described in the Bible just by using a convoluted set of numerological calculations. Through the calculations, Camping claims one can then extrapolate when the Bible “guarantees” the world’s end.
advertisementAs Camping asserts his explanation for May 21, 2011 being the specific Judgment Day, the theory becomes even more farfetched. According to Camping, since God warned Noah of global Judgment Day seven days before it happened, this also correlates to the next Judgment Day seven “days” (specifically millennia) later. More, Camping says the flood can be dated back to exactly 7,000 years ago from May 21.
According to his website he says, “The Bible has given us absolute proof that the year 2011 is the end of the world during the Day of Judgment, which will come on the last day of the Day of Judgment.”
However Camping’s findings should be taking lightly, people have been predicting the end of the world, unsuccessfully of course, since 1260. Camping himself “miscalculated” in 1994. In 1860 there was even a “Great Disappointment” when people were warned about the Second Coming.
Considering this is not the first time Camping has predicted the end of the world and that morbid people throughout the ages have liked to indulge in the idea of “the end of the world,” May 21, 2011 is just going to be another day just as Y2K was another year. Don’t worry, the sky is not actually falling.
According to digtiad.com, a broadcast ministry known as Family Radio located in Oakland, California have come up with the new Judgment Day date. The founder, Harold Camping, is claiming one can know the date of the creation of the world, Noah’s flood and more events that have been described in the Bible just by using a convoluted set of numerological calculations. Through the calculations, Camping claims one can then extrapolate when the Bible “guarantees” the world’s end.
advertisement
According to his website he says, “The Bible has given us absolute proof that the year 2011 is the end of the world during the Day of Judgment, which will come on the last day of the Day of Judgment.”
However Camping’s findings should be taking lightly, people have been predicting the end of the world, unsuccessfully of course, since 1260. Camping himself “miscalculated” in 1994. In 1860 there was even a “Great Disappointment” when people were warned about the Second Coming.
Considering this is not the first time Camping has predicted the end of the world and that morbid people throughout the ages have liked to indulge in the idea of “the end of the world,” May 21, 2011 is just going to be another day just as Y2K was another year. Don’t worry, the sky is not actually falling.
More articles filed under National News
Tuesday, 10 May 2011
U.S. April Conference Board Employment Trends Index (Text)
The Conference Board Employment Trends Index declined 0.6 percent in April to 100.5, down from March’s revised figure of 101.1. This is the largest monthly decline since April 2009. The April figure is up 6 percent from a year ago.
Says Gad Levanon, Associate Director, Macroeconomic Research at The Conference Board: “While employment is growing at the fastest rate in years, the leading indicators for employment are decisively flashing yellow. In April, the Employment Trends Index experienced the largest monthly decline in two years. It is unlikely that the current pace of job growth can be maintained in the months ahead.”
This month’s decline in the ETI was driven by negative contributions from five out of the eight components. The weakening indicators include Initial Claims for Unemployment Insurance, Percentage of Firms With Positions Not Able to Fill Right Now, Number of Temporary Employees, Part-Time Workers for Economic Reasons and Job Openings, which is a forecasted component. The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out so-called “noise” to show underlying trends more clearly.
The eight labor-market indicators aggregated into the Employment Trends Index include:
Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey)
Initial Claims for Unemployment Insurance (U.S. Department of Labor)
Percentage of Firms With Positions Not Able to Fill Right Now (National Federation of Independent Business Research Foundation)
Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
Part-Time Workers for Economic Reasons (BLS)
Job Openings (BLS)
Industrial Production (Federal Reserve Board)Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)
The Conference Board publishes the Employment Trends Index monthly, at 10 a.m. ET on the Monday that follows each Friday release of the Bureau of Labor Statistics employment situation report. The technical notes to this series are available on The Conference Board website: http://www.conference-board.org/data/eti.cfm.
Employment Trends Index (ETI) 2011 Publication Schedule
Index Release Date (10 AM ET) Data for the Month Monday, June 6 May Monday, July 11 June Monday, August 8 July* Tuesday, September 6 August* Tuesday, October 11 September Monday, November 7 October Monday, December 5 November*
*Tuesday releases due to holidays
SOURCE: The Conference Board http://www.conference-board.orgCommunity Health Ends Effort to Buy Tenet After Third Rejection
Community Health also will withdraw its slate of nominees for Tenet’s board of directors, the Franklin, Tennessee-based company said yesterday in a statement. Community Health, the second-largest U.S. hospital operator, said on Jan. 14 it would nominate 10 directors to replace Tenet’s current board.
Tenet’s refusal earlier yesterday to negotiate marked the third time its board rebuffed Community Health, turning down unsolicited bids in December for $6 a share in cash and stock and an all-cash offer in April. On May 2, Community Health raised its “best and final” offer 21 percent to $7.25 a share and said it would walk away from its effort if Tenet failed to begin “good-faith discussions.”
Tenet has said since December that the offers undervalued the company, and analysts have told Bloomberg that Tenet should be trading at more than $9 a share.
“We continue to believe that the execution of Tenet’s current business strategy will deliver greater value than Community Health’s inadequate proposal and we are not willing to enter into discussions based on many factors, including a grossly inadequate offer,” Tenet’s chief executive officer, Trevor Fetter, said in the statement.
Tenet’s board authorized as much as $400 million in share repurchases, according to the statement. The stock will be bought “at times and amounts based on market conditions and other factors,” Tenet said.
Tenet fell 1 cent to $6.52 at 4:15 p.m. yesterday in New York Stock Exchange composite trading. Community Health gained 45 cents to $31.08.
Brooke Gordon, a spokeswoman for Community Health, declined to comment beyond the company’s statement.
Tenet owns 49 hospitals in 11 states. Community Health owns, operates or leases 130 hospitals. HCA Holdings Inc., based in Nashville, Tennessee, is the largest U.S. hospital company.
To contact the reporters on this story: Pat Wechsler in New York pwechsler@bloomberg.net; Alex Nussbaum in New York anussbaum1@bloomberg.net
To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net
Tenet’s refusal earlier yesterday to negotiate marked the third time its board rebuffed Community Health, turning down unsolicited bids in December for $6 a share in cash and stock and an all-cash offer in April. On May 2, Community Health raised its “best and final” offer 21 percent to $7.25 a share and said it would walk away from its effort if Tenet failed to begin “good-faith discussions.”
Tenet has said since December that the offers undervalued the company, and analysts have told Bloomberg that Tenet should be trading at more than $9 a share.
“We continue to believe that the execution of Tenet’s current business strategy will deliver greater value than Community Health’s inadequate proposal and we are not willing to enter into discussions based on many factors, including a grossly inadequate offer,” Tenet’s chief executive officer, Trevor Fetter, said in the statement.
Tenet’s board authorized as much as $400 million in share repurchases, according to the statement. The stock will be bought “at times and amounts based on market conditions and other factors,” Tenet said.
Fraud Lawsuit
Last month, Tenet filed a lawsuit accusing Community Health of defrauding Medicare, the federal health insurance program, and said legal troubles could make it hard to finance the acquisition. Community Health has also been subpoenaed by federal investigators for the Department of Health and Human Services and the Texas Attorney General’s office, asking for documents related to Medicare and the joint state-federal Medicaid program for the poor.Tenet fell 1 cent to $6.52 at 4:15 p.m. yesterday in New York Stock Exchange composite trading. Community Health gained 45 cents to $31.08.
Brooke Gordon, a spokeswoman for Community Health, declined to comment beyond the company’s statement.
Tenet owns 49 hospitals in 11 states. Community Health owns, operates or leases 130 hospitals. HCA Holdings Inc., based in Nashville, Tennessee, is the largest U.S. hospital company.
To contact the reporters on this story: Pat Wechsler in New York pwechsler@bloomberg.net; Alex Nussbaum in New York anussbaum1@bloomberg.net
To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net
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