Multi-State Investigation Leads to Changes in How Company Handles Unclaimed Benefits
WASHINGTON, D.C. (May 15, 2012) — Twenty-two insurance departments have joined a settlement agreement with Metropolitan Life Insurance Company, reaching the required threshold of participating jurisdictions. The agreement follows a multi-state investigation coordinated through the National Association of Insurance Commissioners (NAIC).
The $40 million settlement with the states was announced in April, after the joint examination of MetLife’s use of the Social Security Administration’s Death Master List to investigate the payment of life insurance benefits and reporting of unclaimed property. The NAIC Investigations of Life and Annuity Claims Settlement Practices Task Force, chaired by Florida Insurance Commissioner Kevin M. McCarty, was formed in 2011.
“I am encouraged that other state regulatory officials have quickly added their signatures to make the agreement official,” said McCarty, who is also NAIC President. “This settlement will provide resolution to beneficiaries across the country and help safeguard the expectation of life insurance policyholders going forward.”
By the terms of the settlement, MetLife will regularly check the death master file, or a similar source of death records, to determine if its life insurance policyholders, annuity owners or retained asset account holders have died. MetLife will then make efforts to locate beneficiaries and pay claims. If a beneficiary cannot be located within one year from the date of the match, MetLife will report the funds as unclaimed property to the appropriate state entity. The agreement could yield more than $400 million in unpaid benefits.
“State regulators are dedicated to consumer protection and state-based regulation, which oftentimes involves a multi-state network and partnership,” said Andrew Boron, Illinois Insurance Director. “The Illinois Department opened the investigation, but it was through the collaboration of the six lead states and with the support of other state regulators that we were able to negotiate this outcome.”
The $40 million settlement amount will be divided among the participating jurisdictions. Lead states in the investigation are California, Florida, Illinois, New Hampshire, North Dakota and Pennsylvania. Other states participating in the settlement include Alabama, Alaska, Arizona, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Kansas, Maine, Michigan, Nebraska, Oklahoma, Rhode Island, South Carolina, Utah and West Virginia.
Additional jurisdictions have until June 29 to participate in the settlement.
About the NAIC
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For more information, visit www.naic.org.Tweet