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Federal Lawsuit Filed Against Two Ohio Life Insurance Companies

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A lawsuit was filed by lead plaintiff Rita Koenig, who is requesting class action status, against Western & Southern Mutual Holding Co., and Columbus Life Insurance Co. The lawsuit alleges that the insurance companies have breached their contracts with policyholders by not paying beneficiaries.

The lawsuit claims that the insurance companies use the Social Security Administrations Death Master file, which lists the name of every social security number holder who has died, to stop making annuity payments to deceased annuity recipients, but are not using that same database to make life insurance payments to beneficiaries who are owed money.

“This is a huge issue. There are literally hundreds of policy beneficiaries across the country who aren’t being paid what they are owed,” Koenig’s attorney said. “But what’s even more outrageous is that these companies are conducting annual or quarterly reviews of the Death Master File to ensure they aren’t paying out annuities that they shouldn’t be.”

So far, 35 states are working with the National Association of Insurance Commissioners on investigations into “whether industrywide practices have resulted in insurers knowing about policyholders deaths while still continuing to draw-down premium costs from their accounts until the cash reserves were diminished entirely,” A.M. Best Company Inc., reported. These improper payment practices may exceed damages in excess of $1 billion.

breakinglawsuitnews.com disclaimer: This article: Federal Lawsuit Filed Against Two Ohio Life Insurance Companies was posted on Friday, September 30th, 2011 at 7:58 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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