SACRAMENTO, Calif. (AP) — California officials have reached a $25 million settlement with a company that sells end-of-life policies through funeral planners, state Controller John Chiang announced Monday.

The settlement with Forethought Group Inc., a Texas-based company that, according to its website, offers planning for retirement and end-of-life needs, comes after a 2008 audit found what Chiang termed an "industry-wide practice" of companies failing to pay death benefits even though the companies had access to federal records indicating policyholders had died.

"Those who purchased policies from Forethought wanted peace of mind that their spouses, children and loved ones would not be burdened with the expenses and inconvenience associated with paying and planning for a funeral," Chiang said in a statement. "It's a shameful betrayal of trust when this insurance company -either through wanton greed or careless neglect – did not honor their obligation to pay," the statement said.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.