In a sareholded derivative class action lawsuit filed in New York County Court, lead plaintiff Jack Fishbaum accuses MetLife of exploiting the Social Security Administration’s Death Master File (DMF) to withhold over life insurance benefits from survivors for decades
The class action lawsuit alleges that ”MetLife has consulted the DMF assiduously for those clients with annuities to enable the company to stop paying annuity payments at the time of death,” Courthouse News reports the lawsuit as saying.
“For regular life insurance policies, however, MetLife ignores the DMF so that the company can avoid paying death benefits. MetLife disregarded the DMF for life insurance policies despite touting that beneficiaries would receive benefits upon the death of the insured. This practice enables Met Life to draw the value of a permanent life policy down to the final point of cancellation and continue to collect interest on unclaimed benefit cash. In such instances, MetLife also continues to be a ‘beneficiary’ of the amount with interest collected, and can, over time, allow its requirement to pay benefits at all to basically expire. Thus, MetLife has long used the DMF to promptly stop issuing annuity payments to contract holders who have died, but has ignored the same list to locate family members of deceased policyholders in order to issue payments to a life insurance beneficiary.”
“As a result of MetLife’s unfair and wrongful practices, the company is now the subject of numerous investigations by state regulators.” The lawsuit alleges that because of their actions, 950,000 policies are under review, and 27,889 old claims are being processed, with the amount owed to beneficiaries expected to reach hundreds of millions of dollars.
The class action lawsuit seeks damages for gross mismanagement, breach of fiduciary duty, contribution and indemnification, abuse of control, and waste of corporate assets.