News: 2016 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones today announced settlement agreements with Hartford Fire & Casualty Group, Securian, Great American Life, and Standard related to use of the Social Security Administration’s Death Master File database.
Hartford will pay $2.1 million, Securian $625,000, Great American Life $400,000, and Standard $277,000 to the states participating in the national investigation. All four insurers agreed to reform their business practices to benefit policyholders and use the database to search for policyholder beneficiaries that might be owed benefits from a life insurance policy.
“These four insurers have agreed to do the right thing for consumers and to use the Death Master File to determine if a life insurance policyholder died and then to pay benefits,” said Commissioner Dave Jones. “I urge other life insurers to follow the lead of the 24 life insurers who have entered into regulatory settlement agreements to use the Death Master File to identify deceased policyholders and pay benefits to their beneficiaries.”
The Death Master File provides insurers with the names of deceased people in the U.S. who have social security numbers. It is a useful tool for insurers to identify deceased policyholders and pay life insurance benefits to beneficiaries who may be unaware that they are owed money. However, until recently many life insurers used the Death Master File only to benefit the insurance company, such as using it to identify deceased annuity holders in order to stop making annuity payments, but not to pay life insurance benefits.
These 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 to whom unclaimed benefits may be owed.
In addition to the four life claim settlement agreements, a recent multistate market conduct exam of Primerica shows the insurer has properly used the Death Master File symmetrically across all product lines to ensure the company is identifying deceased life insurance policyholders whose beneficiaries are owed life insurance proceeds. Primerica is the third insurer found in compliance with the law, following multistate market conduct examinations.
A national investigation and settlements by state insurance commissioners led to life insurers returning more than $6 billion to beneficiaries nationwide and over $2.8 billion delivered to the states’ unclaimed property programs, which continue efforts to locate and pay beneficiaries. To date, over 78 percent of the life insurance market by premium volume has either agreed to comply with the law through settlements or been found in compliance. In addition to the investigation, Commissioner Jones chaired a National Association of Insurance Commissioners’ sub-group, which drafted a model law that would require all life insurers to use the Death Master File to identify deceased policyholders in order to facilitate payment of benefits to their beneficiaries. It is now being considered for adoption by the NAIC.
Insurance Commissioners for California, North Dakota, Florida, New Hampshire, and Pennsylvania, are leading the national investigation of life insurers to ensure compliance with California’s Unfair Insurance Practices Act and similar laws in other states. California managed the market conduct examination of Standard, North Dakota managed the exam of Securian, and Florida managed the exams of Hartford and Great American Life, each with assistance from the other lead states.
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To date, state insurance regulators have either reached settlements or concluded the investigation of 27 of the top 40 companies constituting 78 percent of the total market. Efforts continue to be focused on the examination of the remaining 13 insurers.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $288 billion in premiums annually in California. In 2015 the California Department of Insurance received more than 155,000 calls from consumers and helped recover over $84 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.