New Attorney General Extends Probe Into Life Insurance Company Beneficiary Payouts
Insurers accused of failing to properly identify beneficiaries to avoid paying on life insurance policies.
Sep 26, 2011, 09:17 ET
NEW YORK, Sept. 26, 2011 /PRNewswire/ -- Napoli Bern Ripka & Shkolnik LLP commends New York Attorney General Eric Schneiderman for expanding an investigation into the way life insurance companies identify deceased insureds and pay death benefits.
According to several media reports, New York Attorney General Eric Schneiderman recently sent subpoenas to nine companies including units of AXA SA, Genworth Financial Inc., Guardian Life Insurance Co. of America, Manulife Financial Corp., Massachusetts Mutual Life Insurance Co., New York Life Insurance Co., Prudential Financial Inc., and TIAA-CREF details on unclaimed insurance policy proceeds that are supposed to be turned over to the state. Regulators in Florida and California embarked on similar insurance investigations earlier this year, and National Association of Insurance Commissioners, an alliance of the states' top insurance officials, is also looking into such practices.
The New York investigation is focused on whether or not life insurance companies are doing enough to identify deceased insureds and make payments to their designated beneficiaries. Insurance companies can use a database prepared by the Social Security Administration called the "Death Master," which lists all Americans who die to make such determinations. It is known that insurance companies use the database to stop payments under annuity contracts, but not when it comes to paying out claims. In addition to the subpoenas, the Insurance Commissioner is seeking agreements from over 160 life insurers that they will use the Social Security database to determine if any death benefits are overdue and report back to the state.
Purchasers of life insurance policies should feel confident that their family or other beneficiaries will be well taken care of financially after they've passed on. Unfortunately a number of life insurance companies have failed in their obligation to properly identify and pay beneficiaries after a policyholder had passed on, a fact that was exposed by several insurance commissioners earlier this year. This prompted commissioners to dig deeper into understanding how companies were handling life insurance payouts and they were not happy with what they found. According to one Florida regulator: "life insurers may be keeping $1 billion in unclaimed benefits owed to policy holders, beneficiaries or states."
Persons who are 65 years of age or older and have "whole life" or "universal life insurance" with any life insurance companies may find their death benefits and beneficiaries' rights are at risk. Nationally known law firm Napoli Bern Ripka & Shkolnik, LLP is currently investigating claims into the payment practices of these life insurance companies.
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SOURCE Napoli Bern Ripka & Shkolnik LLP
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