State regulators in California and Florida say they will be looking to see how well life insurers are doing at determining when the life insurance policy insureds have died.
John Chiang, the California controller, says his office has been auditing 21 insurers to evaluate compliance with state unclaimed property claims.
The audit has found widespread problems with efforts to locate beneficiaries of life policies and annuity contract death benefits, Chiang says in a statement.
The California Department of Insurance will be working with Chiang to hold a hearing on allegations of death claim payment problems at another large insurer, officials say.
In related news, the Florida Office of Insurance Regulation says it will conduct a hearing May 19 on life insurance company “claim settlement practices, use of the U.S. Social Security Administration’s Death Master File, and compliance with unclaimed property laws.”
Chiang announced Friday that his office has negotiated a settlement with John Hancock, Boston, a unit of Manulife Financial Corp., Toronto (TSX:MFC), in connection with allegations of concerns about benefits payments.
“While John Hancock is the first to be held accountable, it will not be the last,” Chiang says. “I am prepared to pursue all actions necessary – including litigation – to bring the rest of the industry into compliance.”
Controller’s office officials say John Hancock issued a policy in February 1963 who died in April 1999 and then collected premiums from policy cash reserves until the policy was canceled in January 2009, officials say.
“The policy’s file does not contain any indication of when the last contact with the insured occurred, or that any efforts were made to locate the insurance owner prior to the policy lapsing,” officials say.