Death Master investigation leads to nearly $10 billion paid to beneficiaries
News: 2018 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones released a report today detailing the results of the multi-state investigation of life insurance companies’ failure to use the Social Security Administration’s “Death Master File (DMF)” to pay life insurance benefits owed to beneficiaries. The report reveals that the investigation initiated by Jones with five other insurance commissioners in 2011 has resulted in life insurance companies paying out nearly $10 billion in life insurance benefits owed to beneficiaries across the United States, and of that more than $1 billion alone has been paid to California beneficiaries.
“One of the most important and far reaching actions during my term as Insurance Commissioner has been our investigation of life insurance companies’ failure to use the Death Master File database to identify life insurance policyholders who had died and whose beneficiaries were owed payments,” said Insurance Commissioner Dave Jones. “Nearly $10 billion in life insurance benefits have been paid to beneficiaries across the United States as a result of our investigation and enforcement efforts, demonstrating once again the importance of strong regulatory actions by insurance commissioners to protect consumers.”
Commissioner Jones led the National Association of Insurance Commissioners (NAIC) multi-state insurance commissioners’ investigation into life insurers' use of the DMF database, which was initiated after it was discovered life insurers used the DMF database to their benefit to identify deceased annuity holders, so they could stop making annuity payments to them, but failed to use the database to identify deceased life insurance policyholders and failed to pay benefits to their beneficiaries.
In February 2012, Commissioner Jones announced the first of many DMF regulatory settlement agreements with life insurers. The settlement agreement required the life insurer to check the DMF to determine whether any of its historical and existing life insurance policyholders, owners of annuities, and holders of retained asset accounts have died, and then to search for and pay their beneficiaries, and to routinely check the DMF and pay beneficiaries on an ongoing basis. To date, insurance commissioners have reached regulatory settlement agreements with or concluded the investigation of 31 of the top 40 life insurance companies, constituting more than 80 percent of the total life insurance market, based on market share.
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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.