Connecticut's insurance department yesterday kicked off an inquiry into insurers' payments of death benefits and the steps the insurance companies take to locate beneficiaries.
Connecticut's insurance department yesterday kicked off an inquiry into insurers' payments of death benefits and the steps the insurance companies take to locate beneficiaries.
Thomas B. Leonardi, the state's insurance commissioner, noted that some companies may use the U.S. Social Security Administration's master death file to cease annuity payments when a policyholder dies but fail to use the same information to check dormant life policies to determine whether insured people have died.
“It is a double standard that we will not tolerate,” Mr. Leonardi said in an announcement. “Connecticut insurers are put on notice that the department fully expects them to make every effort to locate all beneficiaries — especially in this age of rapid communication and countless databases.”
Connecticut's announcement comes on the heels of a settlement between California and John Hancock Life Insurance Co. over the insurer's failure to make prompt delivery of dead clients' death benefits valued at $20 million.
California has also subpoenaed MetLife Inc. to appear at a May 23 hearing to answer questions about its practices in paying death benefits and locating beneficiaries. Meanwhile, Florida has also asked MetLife and Nationwide Financial Services Inc. to show up at a May19 hearing on the same issue.
California's and Florida's cases are related to a three-year, 35-state investigation of 21 insurers by auditing firm Verus Financial LLC into whether insurers were complying with unclaimed-property laws. That inquiry largely involved state comptrollers and treasury departments, which have jurisdiction over unclaimed property.
Connecticut's inquiry is separate from the larger investigation, said state insurance department spokeswoman Donna Tommelleo. The Nutmeg State's treasury department isn't among the states participating in the Verus audit.
