SACRAMENTO, California – nearly two dozen States have concluded an agreement with John Hancock Life Insurance Co., to settle a dispute on how the Boston insurer pays insurance policies and annuities.
John Hancock executive vice president and General Counsel, Jonathan Chiel, said Friday that the company could improve its practices of claims under the agreement with 22 States and the District of Columbia. He said that the settlement was reached Thursday.
The move comes after an audit by 35 States and the District of Columbia alleged abuse with life insurance policies and annuity contracts. Office of the Comptroller of California found the colony in a release issued Friday.
In one case, John Hancock has used the cash surrender value of a life insurance policy to pay the premium of the individual for seven years after the death of this person in 1999, according to the Office of the controller. The controller said the company did not pay recipients or sent all of the benefits due in respect of the policy in the Office of the controller guard. California has an unclaimed property program that provides companies to send financial accounts lost or abandoned to the State after three years of inactivity which protect them to be lost or spent.
Under the agreement, the company will now make better identify policy holders who died and to notify their beneficiaries, according to the controller John Chiang. He said that values more 6 400 accounts of California dating back to 1992 will be also restored.
Chiang, said that he hoped that the colony will pave the way for reforms to the industry. In addition to John Hancock, 20 other companies were audited by the States.
"While John Hancock is the first to be held accountable, it will be the last," Chiang said in the statement. "I am ready to continue all the necessary measures - including disputes - to the rest of the industry in compliance."
John Hancock, a subsidiary of Manulife Financial Corp., denies any allegations or characterization of wrongdoing regulations. The company said it was outraged by Chiang allegations and characterizations of practices of the company.
"We are disappointed that our willingness to behave in a user-friendly way is being repaid by having our tarnished reputation", said Chiel.
The company issued a statement saying: it has a long history of keeping promises to its customers and agreed to improve its procedures beyond those required by law.
The total value of the colony is not clear, but the California controller, said the change should raise more than $ 20 million for benefits of death and maturation of annuities with owners or, in many casesthe heirs of the owners.
Outside California, the Office of the Comptroller said other States that installs the Georgia included, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, New Hampshire, New Jersey, North Dakota, Oregon, Pennsylvania, South Dakota, TennesseeTexas, Utah, Wisconsin and the District of Columbia.
Other States which have participated in the audit include Arizona, Colorado, Delaware, Florida, Indiana, Mississippi, Missouri, Nebraska, Nevada, Ohio, Rhode Island, Vermont and Washington.
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