New York state will issue a mandate requiring life insurers to cross-check their policy rolls against a federal list of recent deaths after a state Department of Financial Services (DFS) investigation spurred insurers to issue $95.9 million in unpaid life insurance benefits to New Yorkers.
The DFS investigation found that many insurance companies did not use the U.S. Social Security Administration’s Death Master File, a list of recent deaths, to pick out policyholders who had died and whose beneficiaries were due payments. The state subsequently ordered insurers to check their policy rolls against the file.
The check has resulted in insurers making 7,525 payments totaling $95.9 million to New Yorkers. Insurers have made a total of 32,715 payments totaling $262.2 million to policyholders throughout the country.
More payments may be on the way. Insurers have reported cross-checking about 89.58 million records, but they are still examining over 445,000 potentially unpaid claims.
“There is simply no reason why insurance companies shouldn’t be scrubbing their policy lists with the death-index database on a frequent basis,” DFS Superintendent Benjamin Lawsky said in a news release. “Running these computer matches isn’t much of a burden, and the benefits to consumers are significant.”
Some insurers were already using the Death Master File to verify that individuals receiving annuity payments had died and to stop payments to those individuals, according to DFS.
“In the wake of this investigation, New York will now mandate that insurance companies actively search the list of recent deaths so money will be paid to beneficiaries instead of being trapped in limbo, and a new website will help families search for lost or forgotten policies,” Gov. Andrew Cuomo said.
The website, NYPolicyFinder.com, will allow beneficiaries to search for policies and annuity contracts. Search requests will go to insurers, who will have 30 days to inform DFS if they find a policy. DFS will then share the results of the search with beneficiaries.
Contact Seltzer at rseltzer@cnybj.com