The insurance business has gained popularity in the world today where people are looking for the something that would save them from future uncertainties. This is true because there are numerous events in your life that are beyond your control. Even when you try to be cautious with your health, you still end up being sick and being admitted to a hospital for which you need to pay for your hospitalization. As they also say, even by the time that you die, you still get the unlikely feeling that you cannot live your love ones with all the burdens of the cost of your loss. You want to make sure that you would live them not penniless by the time that you die. But despite all the safeguards, your beneficiaries may still experience problems regarding the insurance such as when the insurer failed to pay life insurance claim.

Due to the importance of insurance nowadays where many people invest their money and even entrust their future on insurance companies, insurers are now under strict regulation to avoid circumstances where an insurer failed to pay life insurance claim. A claim for life insurance are now more secured and more protected by laws and regulations by the states that are backed up or strengthened by severe sanctions for non-compliance. In the state of New York, sometime in the year 1999, the New York State Department sanctioned a number of insurance companies that operate in the State for violation of the State of New York's Insurance Law and Regulations involving very prominent insurance firms.

Among these companies were the First United American Insurance Company which is a company based in Liverpool, New York, the CUNA Mutual Insurance Society, and the MONY Group. In the case of FUAIC, the charge was not primarily on the ground that the insurer failed to pay life insurance claim but was anchored on the fact that the company entered into servicing transaction without the prior notice to the Department as mandated by law. The CUNA MIS, on the other hand, was fined for its failure to comply with the maximum limits in writing group credit disability and credit life policies.

Also, the Mony Group was fined when the Department investigation revealed that the insurance company failed to pay the interest for the life insurance policies that were surrendered to it as the main cause of sanction aside form its failure to keep the complete files regarding the distribution of company's advertisement. This scandal caused the 19th largest insurer for life insurance in New York more than 25 thousand dollars. Today, insurance laws are strengthened to ensure that the investments of the population on insurance policy are in good hands.