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Written by: Editor

Published: 29 April 2011

SACRAMENTO – On Friday the Board of Equalization (BOE) released California gasoline and diesel consumption figures for January 2011. 

 

California gasoline consumption was up 2.7 percent in January, and diesel consumption rose 1.4 percent, compared with last year.

 

“Gasoline consumption is up over last year even as gas prices have risen more than 32 cents per gallon,” said Board Member Betty T. Yee. “Higher gasoline prices are a concern for all Californians. However, I am optimistic this consumption increase in light of higher prices is a sign of the strengthening of our economy.”

 

California’s gasoline consumption increased 2.7 percent in January when Californians used 1.20 billion gallons of gasoline, compared to 1.17 billion gallons the same month last year.

 

California’s average price of gasoline rose 10.4 percent in January to $3.39 a gallon, up 32 cents compared to January last year when California gasoline prices averaged $3.07 per gallon.

 

The U.S. average price for a gallon of gasoline jumped 13.7 percent in January to $3.15 per gallon, up 38 cents compared to a year earlier when the U.S. average price for gasoline was $2.77.

 

Diesel sold in California during January totaled 191 million gallons or 1.4 percent more than the previous January when Californian’s used 189 million gallons.

 

Diesel prices rose 56 cents higher to $3.56 per gallon in California during January, or 18.7 percent higher than the previous January when diesel was averaging $3.00 per gallon.

 

The U.S. average price for a gallon of diesel rose 18.9 percent in January to $3.39 per gallon, up 54 cents compared to a year earlier when the U.S. average price for diesel was $2.85.

 

 

The BOE is able to monitor gallons through tax receipts paid by fuel distributors. The figures reported monthly are net consumption that includes BOE audit assessments, refunds, amended and late tax returns, and the California State Controller’s Office refunds.

 

Figures for February 2011 are scheduled to be available at the end of May 2011.

 

All monthly, quarterly, and annual figures can be viewed at www.boe.ca.gov/sptaxprog/spftrpts.htm.

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Written by: Editor

Published: 25 April 2011

SACRAMENTO – On Monday state Insurance Commissioner Dave Jones and State Controller John Chiang announced the issuance of a subpoena and joint investigative hearing into the practices of Metropolitan Life Insurance Company (MLIC), also known as MetLife.

The hearing will focus on MetLife's practices regarding payment of benefits under life insurance policies after MetLife learns of an insured's death – either to the beneficiaries or, if they cannot be located for three years or more, to the State's Unclaimed Property program.

MetLife learned of the deaths of insureds through a database prepared by the Social Security Administration called “Death Master,” which lists all Americans who die.

The commissioner and the controller are responding to preliminary findings from an audit the controller launched in 2008, indicating that for two decades, MetLife failed to pay life insurance policy benefits to named beneficiaries or the state even after learning that an insured had died.

The company has a huge number of so-called industrial policies, valued at an estimated $1.2 billion, which were primarily sold in the 1940s and 1950s to working-class people. The payments, which were collected weekly, typically were higher than the final death benefit.

The controller's unclaimed property audit indicates that MetLife did not take steps to determine whether policy owners of dormant accounts are still alive, and if not, pay the beneficiaries, or the state if they cannot be located.

Simultaneously, the preliminary findings show, when MetLife knew that an owner of an annuity contract – which generates income for the policy owner at the time the annuity matures – had died, or the annuity had matured, the company did not contact the policy holder or beneficiary, even though it subscribed to the Death Master database.

Furthermore, MetLife continued making premium payments from the policy holder's account until the cash reserves were used up, and then canceled the contract.

The announcement comes after Controller Chiang last week announced a landmark settlement with insurer John Hancock and following a multiyear investigation aimed at determining whether the insurance industry was in compliance with state unclaimed property laws requiring them to transfer dormant property to the state for safekeeping when the rightful owners, or their heirs, cannot be located.

The commissioner and controller believe that these practices are not isolated, but are systemic in the insurance industry.

“The thrust of this hearing is to determine whether MetLife, one of the largest life insurers and issuers of annuities in the United States, engaged in unfair practices regarding the payment of life insurance claims to beneficiaries,” Commissioner Jones said.

“California families buy insurance to provide for their retirement security and the financial security of their families when they die,” Controller Chiang said. “The benefits should be paid to the policy beneficiaries or to the State to return to the rightful owners.”

The hearing will be held in Sacramento on Monday, May 23, from 9:30 a.m. to 11:30 a.m.

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Written by: Editor

Published: 24 April 2011

SACRAMENTO – State Controller John Chiang has announced a landmark settlement with insurer John Hancock, paving the way for reforms of widespread industry practices that have victimized the purchasers of life insurance policies and annuity contracts for decades.

It is the first settlement resulting from an audit of 21 insurance companies that Controller Chiang began nearly three years ago.

“Too many Californians have been victimized by a company they entrusted with their retirement security and the care of their families,” Chiang said. “While John Hancock is the first to be held accountable, it will not be the last. I am prepared to pursue all actions necessary – including litigation – to bring the rest of the industry into compliance.”

The controller initiated the audit investigation in July of 2008 to determine the insurance industry’s compliance with state unclaimed property laws.

Administered by the controller, the California unclaimed property program generally provides that businesses must send lost or abandoned financial accounts to the state after three years of inactivity in order to safeguard private property from being lost during mergers or bankruptcies, drawn down by service or storage fees, or simply used by private interests.

The audit revealed an industrywide practice of companies failing to pay death benefits to the beneficiaries of life insurance policies.

Instead, companies would draw-down the policies’ cash reserves in order to continue collecting premium payments from the deceased. Once the cash reserves were depleted, the company would cancel the policy.

The audits also found that insurers did not routinely cross-check the owners of dormant accounts with government databases listing the deceased. In other cases, the company had direct knowledge of the death of a policy owner, but still did not notify the beneficiaries.

For example, a policy was issued by John Hancock on Feb. 16, 1963, to an individual who subsequently died on April 20, 1999.

For the seven years following his death, the company continued to collect premium payments by depleting the policy’s cash reserves until it was finally canceled on Jan. 1, 2009. The policy’s file does not contain any indication of when the last contact with the insured occurred, or that any efforts were made to locate the insurance owner prior to the policy lapsing.

More than 11 years after the insured’s death, John Hancock still has not paid the beneficiaries or sent to the State Controller’s Office for safekeeping any benefits due under the policy. The company has written off all liability under the policy.

The controller’s investigation also exposed similar abuses with the administration of annuity contracts.

For example, John Hancock issued a contract on June 7, 1991, to an individual who subsequently died on May 1, 1995. The company’s own files contain notes revealing that the annuitant owner’s mother called the company in August 2002 reporting that her son had died. Additional notations in the file dated June 15, 2005, and Oct. 13, 2005, state that the annuitant had died.

Despite these acknowledgments, the file indicates the company continued to send mail to him in 2005, 2006 and 2007 – all of which was returned as undeliverable. Another notation was made to the file on July 14, 2009, acknowledging the owner was deceased, and that the company, for the first time, had attempted to contact a relative.

According to the file, on Oct. 26, 2009 – more than 14 years after the annuitant’s death – John Hancock paid the death benefit to the annuitant’s estate.

The groundbreaking settlement requires John Hancock, a subsidiary of Manulife Financial Corp., to do the following

• Restore the full value of more than 6,400 impacted accounts dating back to 1992;

• Create and adhere to methods for better identifying deceased policy holders and notifying their beneficiaries;

• Fully comply with California’s unclaimed property laws and cooperate with the controller’s efforts to reunite more than $20 million of death benefits and matured annuities with their owners or, in many cases, the owners’ heirs;

• Pay the state of California 3 percent compounded interest on the value of the held amounts from 1995, or from the date of the owner’s death, whichever is later.

“These policies were purchased to give the owners and their families peace of mind,” said Chiang. “I will move to quickly return those benefits to their rightful owners.”