Four Insurers Agree to Pay States $3.4 Million in Death Master File Settlement Agreements
August 8, 2016 by Thomas Harman
TALLAHASSEE, Fla. – Four more life insurance companies will pay $3.4 million to five states as part of a settlement involving the Social Security Administration’s Death Master File database to search for policyholder beneficiaries.
Hartford Fire & Casualty Group will pay $2.1 million, Securian will pay $625,000; Great American will pay $400,000, and Standard will pay $277,000, according to the Florida Office of Insurance Regulation.
The Aug. 4 settlement agreements focus on the companies’ use of the file to stop paying a deceased person’s annuity, but not using the same information to find and begin paying beneficiaries for life insurance policies. The California Department of Insurance said insurers have agreed to compare all company records against the Death Master database to determine whether there are unclaimed death benefits and conduct a thorough search for beneficiaries in order to issue unclaimed benefits to them.
California, Florida, New Hampshire, North Dakota and Pennsylvania have been involved in investigating life insurers to ensure they are complying with state laws regarding the file. To date, they have either reached settlements or concluded the investigation of 27 of the top 40 companies. The 27 companies investigated comprise 78% of the nation’s life insurance marketplace.
The examinations for Hartford and Great American were conducted with Florida as a lead state investigator, while California was the managing lead state for Standard and North Dakota was the managing lead state for Securian.
Standard said in a statement the settlement contained no findings of legal or regulatory violations. “We initiated usage of the Social Security Death Master File to assist customers and their beneficiaries long before this audit,” said Justin Delaney, Standard’s vice president of external affairs, in a statement. “The settlement amount covers the audit expenses of the various states participating in this exam, as is customary in the industry.”
“Our goal has always been to ensure that life insurance beneficiaries receive their benefits as promptly as possible,” said Hartford company spokesman Thomas Hambrick.
Securian declined to comment and an attempt to gain comment from Great American was not immediately successful.
The investigating states also announced that Primerica, which began using the DMF across all lines of business in 2011, completed its examination report with no violations. Primerica became the third such insurer to be found compliant.
The OIR said efforts continue toward examination of the remaining 13 insurers. The OIR said that all told more than $6 billion in unknown or lost policy proceeds to beneficiaries has been returned directly by the companies and more than $2.8 billion has been delivered to states’ unclaimed property programs, which continue efforts to locate and pay beneficiaries. The more recent settlements involved Axa S.A. and Prudential plc-operated Jackson National Life Insurance Co., which agreed to make payments of $5.78 million to the state investigators (Best’s News Service, Dec. 17, 2015).
(By Thomas Harman, Washington Bureau manager, BestWeek: Tom.Harman@ambest.com)
