Almost 8,000 people received USD52.6 million in overdue life insurance payments, after the US Department of Financial Service’s pushed insurers to match their policies against a master file of deaths to find when benefits are due.
While some life insurers use the US Social Security Administration’s Death Master File (an up-to-date list of recent deaths) to see when payments are due, it was revealed that many companies don’t stay up to date and as a result owed money to policy holders.
Financial Services Superintendent Benjamin M. Lawsky said, “Our findings clearly show that matching life insurance policies against a comprehensive list of recent deaths is essential to ensure that all beneficiaries receive the benefits they are owed.
“The fact that some life insurers are already using the lists for this purpose and have paid out hundreds of millions of dollars proves it can and should be done.”
On top of the 8,000 people already paid, the review found a further 28,000 matches for which claims processing has been initiated, and a further one million which need further checking.
As a result of the investigation, the Department has now made it a requirement for insurers in New York to use reliable data to see when policy holders die and benefits are due. The insurers are also required to report their findings to the Department once a month for six months.
The earliest year of death for which a benefit payment has been made thus far is 1970, and the largest benefit payment made thus far is USD673,485. Insurers are required to pay interest on delayed payments.
