Pennsylvania Insurance Commissioner Michael Consedine announced today that the state has reached a multi-state, regulatory settlement agreement with New York Life Insurance Company. Under the terms of the settlement, New York Life has agreed to implement a number of business reforms to promptly identify when an insured has died, and to locate and make payment to beneficiaries.
“Today’s settlement, requiring robust searches to locate and make payment to life insurance beneficiaries, is another step to ensure that Pennsylvania policyholders and their beneficiaries are protected,” said Consedine. “I am pleased that New York Life worked cooperatively with the lead states to tailor their existing business practices to safeguard consumers across the country.”
This settlement was reached through the coordinated efforts of six state insurance departments including California, Florida, Illinois, New Hampshire, North Dakota and Pennsylvania. The investigation focused on New York Life’s use of the Social Security Administration’s Death Master File (DMF).
For years, life insurers have selectively used the DMF to stop annuity payments. However, they did not use the database to identify deceased life insurance policyholders in order to pay proceeds to beneficiaries. With this settlement, life insurers representing more than 50 percent of the total national market have conformed or agreed to reform their business practices. They will use the DMF, or a similar database, to search for deceased policyholders and make benefit payments.
To see a copy of the full settlement agreement, visit www.insurance.pa.gov and click on the “consumer protection” tab.
Consumers with insurance questions should call the department’s toll free number at 877-881-6388.\
(Source: Pa. Insurance Department)