Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Life Health > Life Insurance

New York Issues Unclaimed Property Report Guidelines

By Arthur D. Postal

X
Your article was successfully shared with the contacts you provided.

WASHINGTON—The New York Department of Financial Services has issued guidance as to how the 172 insurance companies in the state should provide data to the DFS regarding their handling of unclaimed insurance policies and annuities.

The initial reports are due Oct. 31.

The detailed reports were requested by the state Insurance Department, now the DFS, on July 5 as part of a probe by insurance departments and treasurer’s offices nationwide as to so-called “asymmetrical handling” of policy claims.

The probe deals with allegations that insurance companies used the Social Security death master file to cut off beneficiaries of annuities immediately in cases where the beneficiary died but the family did not notify the insurance company.

At the same time, investigators found, in many cases companies did not use the file in the same manner to determine if the holder of a life insurance policy had died and therefore make efforts to find the beneficiaries.

The DFS is also expected to make public today guidance as to how the comprehensive data should be transmitted securely to the department, a DFS spokesman confirmed.

Lawyers for several insurers involved in the probe said the new guidance is designed to ensure that there will be a secure portal that can accept the filings and how companies can be assured that the remains confidential once filed. 

One lawyer said he is telling companies they should add the appropriate FOIA disclosures.

The so-called “308 letter,” which is a request for information to which insurers are legally required to respond, advised all authorized life insurers and fraternal benefit societies to conduct a cross-check of all life insurance policies, annuity contracts, and retained asset accounts on their administration data files, including group policies for which a life insurer maintains detailed insured records, should be made using the latest updated version of the U.S. Social Security Administration’s Death Master File.

The cross-check is used to identify any death benefit payments that may be due under life insurance policies, annuity contracts, or retained asset accounts as a result of the death of an insured or contract or account holder.

The Oct. 31 deadline is the first required under the July 5 308 letter. Under the notice, these notices are also required to be filed at the end of every through March 2012.

A parallel probe of the issue is being conducted by the New York attorney general’s office. In August, it subpoenaed the records of the nation’s nine largest insurers, according to officials of several of the insurers. The Attorney General’s office has declined to comment on the issue.

The data that must be filed by the insurers with the DFS by Oct. 31 include a narrative summary of the SSA Master File cross-check procedures implemented by the life insurer, including the earliest year that cross-check procedures were performed on the life insurer’s data and the extent to which data files that are maintained by third party vendors were encompassed by the cross-check procedures.

The DFS is also demanding that the insurers provide the overall results of the SSA Master File cross-check, including the number of matches; the number of matches eliminated because the life insurance policies, annuity contracts, or retained asset accounts were previously paid or not in-force at the time of death; the number of matches where the life insurer is attempting to locate the beneficiary; and the number of matches still being reviewed.

It is also asking for information on the current procedures utilized by life insurers to locate beneficiaries.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.