JEFFERSON CITY – Many people take it for granted that their life insurance company will pay their family if they die, but recent developments suggest they shouldn’t.
For the second time in two weeks the Missouri Department of Insurance has reached an agreement with a major life insurance company. The settlement requires MetLife to pay $40 million to multiple states for examination, compliance and monitoring costs. Missouri’s share of the payment is $729,503. MetLife is the second-largest life insurer in the state, with nearly $138 million in premium sales in Missouri in 2011. Missouri Director of Insurance John M. Huff says Missouri is part of a $40 million multistate settlement with MetLife Inc. over its handling of life insurance benefits.
A multistate examination into several large life insurance companies found that MetLife did not make enough of an effort to find and pay beneficiaries of life insurance policies. The Social Security Administration’s Death Master File allows insurance companies to find information about deceased policyholders, but the investigation found that MetLife failed to aggressively use the Master File.
“Life insurance companies have an obligation to pay benefits to their policyholders when they die, and that requires doing everything they can to learn of the death and pay beneficiaries,” said Huff. “With this agreement, MetLife’s policyholders can be assured their loved ones will be financially protected, which is why they bought the coverage in the first place.”
The settlement requires MetLife to routinely consult the Death Master File to learn about the death of its life insurance policyholders. When a policyholder dies, MetLife must conduct a thorough search for beneficiaries. If it can’t find beneficiaries, MetLife must turn the benefit money over to the Missouri State Treasurer’s office as required by state unclaimed property laws.
Regulators believe the settlement could result in $400 million in payouts to beneficiaries nationally.
On June 5, the Missouri Insurance Department announced a similar settlement with Prudential regarding use of the Social Security Death Master File. In that case, Prudential was required to pay more than $17 million in fines nationally, and more than $200,000 in Missouri. Prudential is Missouri’s seventh-largest life insurer.
The Department of Insurance also offers help to consumers looking for life insurance policies on deceased loved ones. Consumers can submit a search form to the department’s Life Policy Locator, which triggers a search for policies among licensed life insurers in Missouri. If a policy is located, the insurance company will notify beneficiaries.
Consumers with complaints about life and other types of insurance, as well as general questions can call the department’s Insurance Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.
—This article is a press release issued from a wire or corporate source. In some cases, Missouri Business Alert will contribute additional reporting.