The American International Group AIG became the latest insurance company to settle an inquiry by a group of state insurance regulators into the handling of death benefits, the payments to a beneficiary when the holder of a life insurance policy dies. They agreed to pay eleven million to settle it, along with Nationwide Financial Services, MetLife and Prudential Financial.
The companies have agreed to check their lists of policyholders regularly against the Social Security Administration's death master file database and to make more effective efforts to locate beneficiaries, according to Pennsylvania officials.
Traditionally, insurance companies have required beneficiaries to file claims to receive benefits from life insurance policies. That has meant that claims sometimes are never filed — perhaps because policy documents were lost, or because beneficiaries did not know a policy existed. But state insurance regulators, for the past two years, have been looking into the practices of large insurers and urging them to proactively identify policies that may be due for a payout.
State regulators have charged that insurers used the Social Security Administration's list of recently deceased people to stop making annuity payments to dead customers, but, at the same time, did not use the list to check whether any life insurance policyholders had died.
Pennsylvania authorities said A.I.G. had agreed to use the death master file "on a uniform basis" to find dead policyholders and pay beneficiaries.
The A.I.G. settlement and several others were negotiated with a multistate task force created by the National Association of Insurance Commissioners. AIG agreed to pay the $11 million to resolve disputes with the regulators.
Life insurance attorneys advise that the best way to avoid problems with life insurance claims is for policyholders to discuss policies with their beneficiaries. There are many people who think a deceased parent had a life insurance policy, but they are not sure — and don't know how to find it. Policyholders should inform their beneficiaries of the policy or keep copies of a policy at an off-site location — such as in a safe deposit box, or with a lawyer or financial adviser so that the beneficiaries will know where the documents are kept and how to get access to them.
Dealing with life insurance claim denial is an emotional experience for the decedent's family. When your claim for death benefits has been denied you need the help of a reputable life insurance law firm that will fight against the insurance company. Our life insurance lawyers will fight hard for your right to receive the benefits you are entitled to receive under the law. Our firm focuses on protecting the rights of the decedent's family to recover life insurance benefits and will stop at nothing to see justice served. Please call us now to see how we can help. We offer free initial consultations to clients whose life insurance claims have been denied or rejected.