The tables have turned. A legal settlement is forcing insurers to use a tool on themselves that was actually meant to keep consumers honest.
The tables have turned. A legal settlement is forcing insurers to use a tool on themselves that was actually meant to keep consumers honest.
Insurers have long used the Social Security Administration’s Death Master File (DMF) to cut off payments after annuity holders passed away, but a new settlement is forcing insurers to use the same list to identify beneficiaries of lapsed life insurance policies.
In a settlement with seven American states that participated in the national investigation of life insurers, Guardian Life and Pacific Life will pay $2 million and $2.45 million respectively related to the use of the DMF.
“Locating life insurance beneficiaries is a crucial part of this business and Guardian Life and Pacific Life have agreed to improve their practices in doing that,” said North Dakota Insurance Commissioner Adam Hamm, a participant in the investigation along with California, Florida, Illinois, New Hampshire, Pennsylvania and Washington.
For many years, life insurers have benefited from the DMF by using it to stop payments to annuity holders. Yet they haven’t used the information to identify deceased life insurance policyholders to pay beneficiaries.
Under the terms of the settlement, Pacific Life and Guardian Life will use the DMF on a uniform and timely basis to search for policyholders that have died and make payments to their beneficiaries. The companies also identified numerous other business reforms to promptly identify a deceased policyholder.
This investigation adds to successful settlements with two-thirds of the life insurance industry on proper death benefit payments to insurance consumers.
So far, more than $1 billion has been returned to beneficiaries across the country with an additional $1.7 billion going to the states’ unclaimed property bureaus.
Insurers have long used the Social Security Administration’s Death Master File (DMF) to cut off payments after annuity holders passed away, but a new settlement is forcing insurers to use the same list to identify beneficiaries of lapsed life insurance policies.
In a settlement with seven American states that participated in the national investigation of life insurers, Guardian Life and Pacific Life will pay $2 million and $2.45 million respectively related to the use of the DMF.
“Locating life insurance beneficiaries is a crucial part of this business and Guardian Life and Pacific Life have agreed to improve their practices in doing that,” said North Dakota Insurance Commissioner Adam Hamm, a participant in the investigation along with California, Florida, Illinois, New Hampshire, Pennsylvania and Washington.
For many years, life insurers have benefited from the DMF by using it to stop payments to annuity holders. Yet they haven’t used the information to identify deceased life insurance policyholders to pay beneficiaries.
Under the terms of the settlement, Pacific Life and Guardian Life will use the DMF on a uniform and timely basis to search for policyholders that have died and make payments to their beneficiaries. The companies also identified numerous other business reforms to promptly identify a deceased policyholder.
This investigation adds to successful settlements with two-thirds of the life insurance industry on proper death benefit payments to insurance consumers.
So far, more than $1 billion has been returned to beneficiaries across the country with an additional $1.7 billion going to the states’ unclaimed property bureaus.
