The Social Security Administration’s Death Master File database 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 themselves, such as using it to identify deceased annuity holders in order to stop making annuity payments, but not to pay life insurance benefits.
Four years ago we blogged about Metropolitan Life Insurance Company’s (“MetLife”) inconsistent use of the Death Master File database to deprive beneficiaries of $40 million in life insurance benefits. See “MetLife Pays $40 Million To Settle Allegations That It Failed To Properly Identify And Pay Life Insurance Beneficiaries”. That database, created by the Social Security Administration, is consistently updated with the names and identity of everyone for whom a death certificate is filed in the United States. The Administration licensed it to life insurance companies so they could easily identify decedents, a necessary part of their business. We again blogged about it in April. See “National Investigation Uncovers Systemic Practice Among Life Insurers Depriving Beneficiaries of $5 Billion!”.
Not surprisingly, it turns out that most life insurance insurers are engaged in the same actions. – Insurance Commissioner Dave Jones today announced settlement agreements with Hartford Fire & Casualty Group, Securian, Great American Life, and Standard Insurance Companies related to use of the 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.
It would therefore behoove policyholders and beneficiaries to vigilantly investigate and protect their own life insurance policies. If you believe that a life insurance company failed to pay the benefits you are owed under a life insurance policy, please contact McKennon Law Group PC for a free consultation.