Securities Fraud Investigation Involving Retained Asset Accounts

The White Law Group is investigating possible securities fraud claims involving retained asset accounts.

Retained asset accounts are facing growing scrutiny, with regulators calling into question the disclosure policies of insurance companies that market and sell the products to clients.

Retained-asset accounts are products that allow insurers to profit from beneficiary death benefits by placing the funds in interest-bearing accounts. A retained-asset is considered a temporary repository of funds.  Instead of paying out a lump-sum upon the death of a policyholder, insurers keep the money in their own general fund.  By keeping the money, insurers are able to earn a higher return on the funds than they pay out in interest.

Insurers use retained asset accounts as a way to keep cash when beneficiaries of the policies do not elect a lump-sum payout of death benefits.  Beneficiaries are instead issued a “checkbook” to access their funds. Meanwhile, the insurance companies earn interest from the money in the accounts.

In July, New York Attorney General Andrew Cuomo opened a fraud investigation into retained asset accounts, with subsequent probes announced by Georgia and New York insurance departments.  The focus of Cuomo’s investigation appears to be concerning whether consumers thoroughly understand the payout options associated with retained-asset accounts. New York has thus far subpoenaed Prudential Financial, MetLife and several other insurers as part of its investigation into possible fraud in the life insurance industry.

Retained asset accounts are not backed by the Federal Deposit Insurance Corporation – a fact that creates uncertainty and added risks.

If you have information that would assist us in our investigation, please contact our Chicago, Illinois office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.

For more information on the firm, visit https://whitesecuritieslaw.com.