Settlement agreement involved the use of the Social Security Death Master File
The Commonwealth of Massachusetts will receive approximately $1.7 million dollars from Metropolitan Life Insurance Group and the Prudential Insurance Group regarding those companies improper use of the Social Security Administration’s (SSA) Death Master List. The penalties to be paid to the Commonwealth are part of a multi-state agreement that the parties had entered into earlier this month.
The Division of Insurance alleged that the life insurers had failed to exert any regular and consistent effort to verify if a policyholder had died and whether or not a beneficiary need to be identified and contacted. The Massachusetts Division of Insurance said that such actions on the part of the insurers would have been relatively easy to conduct because the companies link directly to the Social Security Death Master List.
“These settlement agreements underscore the value of interstate cooperation in the insurance arena,” said Commissioner Murphy. “More importantly, consumers, and especially families who have lost loved ones and found themselves battling large insurers over what they were rightfully owed, now can take some small comfort in knowing that industry regulators have been at work on their behalf, in Massachusetts and across the country.”
Under the settlement agreements, both MetLife and Prudential have agreed to be more diligent in regularly checking the SSA Death Master List or a substantially similar source of death records to verify the deaths of any of their policyholders. In addition, the insurers must make valid efforts to locate any policyholder’s beneficiary and to pay those claims in a timely manner. Under the agreement, if no beneficiary is identified and aid with one year of the date of a match, the insurers must report those fund to the appropriate state entities as unclaimed property.
The settlement agreement with MetLife also requires that the company report to states on a quarterly basis over the next three years regarding its actions to comply with the agreement. A final re-examination of the company will occur at the end of that period. Under the terms of the Prudential settlement, the company must report to states for a period of five years followed by a final re-examination.