BISMARCK, N.D. – Insurance Commissioner Jon Godfread today announced the North Dakota Insurance Department has recovered more than $5.5 million for North Dakota life insurance beneficiaries through the examination of 30 top life insurers’ use of the Social Security Administration’s Death Master File (DMF). The DMF is a comprehensive list of people who have died in the U.S. The examinations found that most life insurance companies have unfairly used the DMF in the past to search for and stop payments to deceased annuity holders but have not used the database to identify deceased life insurance policyholders to pay beneficiaries. Of the 30 examinations, 28 have resulted in settlements and changes to beneficiary search practices which prohibit companies from conducting the unfair searches.
“This is a huge victory for North Dakota consumers,” Godfread said. “Searching for and locating life insurance beneficiaries is a critical part of this business. The Department is committed to working together with other states to continue investigating insurance companies’ use of the Death Master File because with the tools available to insurance companies today, there is no reason for them not to search for and locate policy beneficiaries.”
This announcement follows two separate settlement agreements with Aflac and State Farm regarding their use of the DMF. Aflac agreed to a settlement of $350,000 and State Farm agreed to a settlement of $250,000. The agreements are a result of coordinated multi-state examinations among state insurance departments in North Dakota, California, Florida, New Hampshire and Pennsylvania. North Dakota will receive approximately $15,000 from the agreements. Additionally, under the terms of the settlements, Aflac and State Farm will continue to implement a number of business reforms to promptly identify when a policyholder has died using the DMF to search for deceased policyholders in a uniform and timely manner, and make payments to their beneficiaries.
State insurance regulators have either reached settlements or concluded the investigation of 30 of the top 40 companies and as a result, life insurers have paid $8.7 billion to life insurance beneficiaries nationwide. The Department has been part of 28 multi-state settlements with insurance companies regarding life insurance practices and to date has received almost $2.6 million for North Dakota. Efforts continue to be focused on the examination of 10 remaining insurers: Northwestern Mutual, Great West, Protective Life, American Equity, Principal Financial, Allstate, Western Southern, OneAmerica, Ohio National and American National.
In an effort to reunite policy owners and beneficiaries with life insurance policies and annuity contracts, the National Association of Insurance Commissioners created a Life Insurance Policy Locator application. The application is a free service intended to be an easy-to-use tool to help insurance consumers find lost or forgotten life insurance policies and annuity contracts. Since the application’s launch in 2016, six policies have been located in North Dakota using the Life Insurance Policy Locator and $254,000 has been claimed. Visit the Department’s website at www.nd.gov/ndins/ to get started using the Life Insurance Policy Locator.
“There are many North Dakotans who don’t know they could be missing life insurance policies, or don’t know where to begin to locate them,” Godfread said. “The Life Insurance Policy Locator tool on our website is critical in helping reconnect people with lost life insurance policies. This tool is simple to use and easy to access, I encourage everyone to check it out.”