Two additional insurers agree to appropriate use of Death Master File
News: 2015 Press Release
SACRAMENTO, Calif. - Insurance Commissioner Dave Jones today announced multi-million dollar settlement agreements with Guardian Life and Pacific Life related to their use of the Social Security Administration's Death Master File database. Both insurers agreed to reform their business practices and use the database to search for policyholder beneficiaries that might be owed benefits from a life insurance policy.
"I commend Pacific Life and Guardian Life for entering into these settlements," said Commissioner Jones. "I urge other life insurers to follow the lead of these insurers and reform their business practices to use the Death Master File database to identify when policyholders have died and to pay benefits to their beneficiaries."
Created by the Social Security Administration, the Death Master File database provides insurers with the names of people in the U.S. who are deceased and have Social Security numbers. Using this information, life insurers are able to identify deceased policyholders and pay life insurance benefits. But many life insurers used the Death Master File database only to benefit the insurance company as opposed to policyholders -for example, to identify deceased annuitants to stop annuity payments, but not to pay life insurance benefits. As a result of the national investigation and settlements obtained by state insurance commissioners, life insurers have returned more than $1 billion to beneficiaries nationwide. To date, nearly 70 percent of the life insurance market by premium volume has either agreed to comply with the law through settlements or been found in compliance.
Guardian Life and Pacific Life 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.
As part of the settlements, Guardian Life will pay $2 million to the states participating in the national investigation of life insurers and Pacific Life will pay $2.45 million. To date, 18 life insurers have agreed to reforms in using the Death Master database to search for deceased policyholders and make benefit payments.
Insurance Commissioners for California, North Dakota, Florida, Illinois, 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 led the market conduct examination of Pacific Life and New Hampshire led the exam of Guardian Life, each with assistance from the other lead states.
Media Notes:
- A copy of the agreement for Pacific Life is available to the public.
- A copy of the agreement for Guardian Life is available to the public.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
