The California Department of Insurance, along with five other state insurance departments, reached a settlement with Metropolitan Life Insurance Company, Inc. (“MetLife”) over allegations that the company failed to properly utilize the Social Security Administration’s Death Master File database to identify deceased life insurance policyholders and pay their beneficiaries. In addition to promising to enact business reforms to ensure that it promptly pays life insurance benefits to the proper beneficiaries, MetLife will pay $40 million to the state insurance departments.
In announcing the settlement, California Insurance Commissioner Dave Jones called the settlement “an important victory for consumers,” explaining that:
“For many years, MetLife selectively used the Social Security Administration’s Death Master File database to cut off payments to annuity holders but did not use that database to identify deceased life insurance policyholders and pay their beneficiaries. Under today’s settlement, that practice will end. I hope other life insurers will follow MetLife’s lead and enter into similar agreements.”
As a result of this settlement, every month, MetLife is required to use the Social Security Death Master File to determine whether its life insurance policyholders, annuity owners and holders of retained asset accounts have died. If MetLife learns that a policyholder died, it must conduct a thorough search for beneficiaries, using contact information in its records and online search and locator tools. If MetLife does not find a beneficiary within a year of learning of a death, it must transfer the benefit to the appropriate state controller as unclaimed property.
The state departments of insurance alleged that, prior to this settlement, MetLife had a decades-long practice of improperly retaining life insurance benefits that should have been paid to the beneficiaries of its life insurance policies. Earlier this year, Commissioner Jones reached a similar settlement agreement with Prudential Life Insurance Company.
If you believe that a life insurance company failed to pay the benefits you are owed under a life insurance policy, please contact our office for a free consultation. Our firm is currently advising existing clients regarding these issues.