My sister and I each hold POA for my mom who is diagnosed with Dementia. My sister changed my mothers life insurance via POA to show her as the owner and listed her husband as the beneficiary once I discovered this she refuses to change this back to show a family member as beneficiary. This is a small 10,000 policy but was for my moms end of life expenses and burial. Is what she did legal?
There is only one thing that is illegal for a POA to do - under any circumstances and that is to change a will. This is true of all 50 states.
At the very least you could stop the payment.
As Rainmom said, if your POA allows it a POA agent CAN change the policy ownership and beneficiary. So you need to see just how your POA reads. How did you find out? What was your sisters reasoning? You say she refused to change it back so she knows that you know.
Did an attorney prepare the POA?
So again, check the POA first - then decided your action plan.