Tag: Capital One
"Prudential paid survivors like Cindy Lohman, the mother of an Army sergeant who died in Afghanistan, 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings. Lohman told Bloomberg Markets that Prudential's IOUs were rejected twice by salespeople when she tried to use them to make retail purchases." - Bloomberg
And New York is not alone. Kansas and Missouri insurance regulators are among those who are going after the insurers who offer so-called retained-asset accounts after Bloomberg Markets reported that the funds allow more than 100 carriers to earn income on $28 billion owed to life insurance beneficiaries. And the practices may violate federal bank law. One of the insurers involved in this practice may be the McLean based Capital One Financial Corp.
Update: This practice is widespread, affecting the Federal Employees Group Life Insurance program and many private sector insurance plans.