Florida Announces a $12.6 Million Multi-State, Multi-Agency Life Claim Settlement Agreement with Lincoln
TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced a $12.6 million life claim settlement agreement has been reached with Lincoln National Life Insurance Company, Lincoln Life and Annuity Company of New York and First Penn Pacific Life Insurance Company (collectively referred to as “Lincoln”).
Lincoln is one of the top five life insurers in the United States and represents approximately 4.4% of the overall life and annuity market. The settlement agreement with Lincoln and other similar insurers focuses primarily on the asymmetrical use of the Social Security Administration’s Death Master File (DMF) to cease making annuity payments, but not to search for beneficiaries of a life insurance policy who may be due benefits.
Lincoln has agreed to implement business reforms correcting this practice and to make a multi-million dollar payment, which will be disbursed among the participating states. Florida’s allocation of the $12.6 million payment is expected to be more than $1 million.
The multi-state examination was conducted by Florida, California, Illinois, Indiana, Iowa, New Hampshire, North Dakota, and Pennsylvania (managing lead state). Along with these states, the agreement includes the Florida Department of Financial Services (DFS), the Florida Office of the Attorney General (AG), and the Florida Office of Insurance Regulation (Office).
“With the signing of this agreement, more than 55% of the life and annuity insurance companies representing the market have now pledged to implement business reforms to appropriately identify deserving beneficiaries and return monies owed,” stated Florida Insurance Commissioner, Kevin McCarty. “This multi-state, multi-agency effort is making great strides and we will continue these efforts on behalf of Florida’s consumers.”
“I am very pleased with the success we are having in making sure companies who conduct business in Florida are held accountable for providing what is owed to their customers,” said CFO Jeff Atwater. “This settlement agreement is a win for the people of Florida.”
"Through hard work, saving and careful planning, large numbers of Floridians pay life insurance premiums for decades to benefit survivors. They expect insurance companies to diligently locate beneficiaries and trust them to pay policy funds in a timely manner. By entering into this settlement, Lincoln and its affiliates acknowledge the expectations and trust of their insurance customers, as well as their compliance obligations under Florida law, regarding unclaimed life insurance proceeds,” said Attorney General Pam Bondi.
The settlement agreement requires implementation of the following business practices and reform measures:
· 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 quarterly reports to the lead states 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.
Established in 2011, the multistate examination process of the top 40 life and annuity insurers in the United States is guided and coordinated by the NAIC Life/Annuities Claim Settlement Practices Task Force, which is chaired by Commissioner McCarty.
For more information, visit the Office’s Life Claims Settlement Practices website page. To search or submit a request for unclaimed property, visit www.FLTreasureHunt.org, or call 1-88-VALUABLE or (850) 413-3089.