TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty announced today that a $15 million life claim settlement agreement has been reached with New York Life Insurance Company (New York Life) and its affiliates.
The New York Life settlement represents the ninth life claim settlement agreement for Florida. Presently, the state insurance regulators have either reached settlements or concluded the investigation of half of the top 20 companies constituting over 50% of the total market. Nationally, the priority is focused on the remaining examinations of the 30 top life and annuity insurers in this market.
One major focus of these settlements is the insurers’ asymmetrical use of the U.S. Social Security Death Master File (DMF) and the insurers’ practice of using it to stop paying annuities, but not to search for beneficiaries of a life insurance policy to determine if benefits are due. As part of the settlement agreements, insurers are now required to use the DMF in locating beneficiaries and must promptly remit payment to the unclaimed property division of each state for beneficiaries that cannot be located. New York Life has demonstrated that it has been using the DMF symmetrically with quarterly DMF runs since regulators commenced examinations in 2011.
The multistate examination process is guided and coordinated by the Life/Annuities Claim Settlement Practices Task Force, established by the National Association of Insurance Commissioners (NAIC) in 2011 and chaired by Commissioner McCarty. The New York Life examination was lead by California, along with Florida, Illinois, North Dakota, New Hampshire and Pennsylvania. The agreement is between the Florida Department of Financial Services (DFS), overseen by Chief Financial Officer Jeff Atwater, the Florida Office of the Attorney General (AG), overseen by Attorney General Pam Bondi, and the Florida Office of Insurance Regulation (Office) and the other lead states.
Florida Insurance Commissioner Kevin M. McCarty stated, “This is another step to ensuring all Floridians and non-Floridians alike receive the benefits and monies to which they are entitled. I remain confident that more companies will follow suit and re-evaluate their business practices.”
“Insurance companies must fulfill their financial obligations, and this settlement is another victory that will help make sure they do,” said CFO Jeff Atwater. “I am proud that our efforts are helping Floridians fight against deceitful business dealings.”
"Life insurance companies doing business in Florida are responsible for identifying, locating and issuing life insurance policy proceeds to beneficiaries in a timely manner. This settlement is a result of the continuing efforts by my office, the Office of Insurance Regulation, and the Department of Financial Services to protect Florida consumers who made life insurance premium payments fully expecting that the insurer would make timely proceed payments to beneficiaries," said Attorney General Pam Bondi.
As part of the agreement, New York Life agreed to:
· Compare all company records against the DMF Update File every month and against the Complete DMF file at least annually from the Agreement effective date.
· Provide the lead states quarterly reports about the implementation and execution of the requirements of the Agreement for 36 months following its conclusion.
· A follow-up examination to determine compliance 39 months following the conclusion of this Agreement.
This agreement also requires payment of $15 million to the participating states. Florida’s share of the allocation is expected to be more than $655,000.
For more information about this issue, visit the Office’s Life Claims Settlement Practices website page. To search for or claim unclaimed property, visit www.FLTreasureHunt.org, or call 1-88-VALUABLE or (850) 413-3089.
About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. For more information about the Office, please visit www.floir.com or follow us on Twitter @FLOIR_comm.