Life Insurance Companies to Pay $3.4 Million to Settle Death Benefit Mishap

Posted on August 19th, 2016 at 10:48 AM

From the Desk of Jim Eccleston at Eccleston Law LLC:

State regulators recently have been investigating insurance companies who allegedly have failed to make death benefit payments on a timely basis. Most recently the regulators have reached settlements with four large insurers.

Hartford Financial Services Group, Securian Financial Group Inc., Great American Insurance Group and Standard Insurance Co. reached a settlement with five state regulators. The regulators were focused on the companies’ use of the Social Security Administration’s Death Master File database, which is used to help insurers identify deceased policyholders and pay benefits to beneficiaries.

Regulators became concerned that insurers only were using the database in instances where it benefitted the firm, such as finding the deceased holders of annuity contracts in order to stop making payments, while not using the database to locate persons who are entitled to claims.

After the settlement Hartford, Securian, Great American, and Standard paid $2.1 million, $625,000, $400,000, and $277,000, respectively. In addition the companies pledged to change their business practices surrounding the use of the database.

The inquiry into these four insurers marks the most recent in a trend to investigate the top 40 life insurance companies. Last year, regulators reached multiple multi-million dollar settlements with Jackson National Life Insurance Co., AXA Equitable Life Insurance Co. of America, Pacific Life Insurance Co., and Allianz Life Insurance Co. of North America. 

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today. 

Related Attorneys: James J. Eccleston

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