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| | Multi-Million Dollar Settlement Reached In Lincoln National Death Master Case. Over half of the total market is now in compliance.
By Press Release - December 10, 2013
SACRAMENTO, Calif. – Insurance Commissioner Dave Jones announced today that the California Department of Insurance has, with other state insurance regulators, reached a settlement with the Lincoln National group of insurers over the insurers’ use of the Social Security Administration's Death Master File database. The settlement ensures protection for policyholders and beneficiaries.
"This agreement is another success in our nationwide effort to reform life insurance industry practices regarding the use of the Death Master database,” said Commissioner Jones. “I have made a commitment to consumers and will ensure companies make good on their promises to their policyholders."
Lincoln National agreed to pay $12.6 million to insurance regulators in addition to agreeing to a number of business practice reforms, including using the Death Master File database to search its records for deceased life insurance policyholders so beneficiaries may be paid. Pennsylvania served as the lead state in this investigation, with support from Commissioner Jones and insurance regulators in Florida, Illinois, Indiana, New Hampshire and North Dakota.
Lincoln National holds roughly four percent of the national life insurance market, with over $21 billion in annual premiums. With this latest settlement, life insurers representing over 55 percent of the total national market have conformed or agreed to reform their business practices and use the Death Master File to search for deceased policyholders and make benefit payments.
For many years, life insurers have used the Death Master File to search for and stop payments to annuity holders, but did not use the database to identify deceased life insurance policyholders whose beneficiaries are owed life insurance proceeds. It is estimated that through this practice insurers avoided paying over a billion dollars in life insurance proceeds to beneficiaries.
from Press Release, the California Department of Insurance
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