A House panel will hold a hearing Thursday on the accuracy and uses of the Social Security Administration’s (SSA) Death Master File (DMF).
The issue is of growing importance to the life insurance industry out of concern of incorrect use of the DMF.
Several industry officials said the industry played no role in the decision of Rep. Sam Johnson, R-Texas, chairman of the Subcommittee on Social Security of the House Ways and Means Committee, to hold the hearing but he will be monitoring it.
No list of witnesses will be available until Wednesday, Johnson’s office said.
Out of concern of misuse of the DMF, Johnson recently introduced a bill, H.R. 3475, the “Keeping IDs Safe Act of 2011,” which would stop Social Security from making this information public.
The industry has been criticizing the use of the system to publicly criticize them and investigate them, citing inaccuracies.
That is because state Insurance Department and revenue officials have been using the DMF to initiate intense probes of their policies. They use the file to find beneficiaries of life insurance policies and, if not, turn over the unclaimed property to the states promptly.
Such large insurers as MetLife, John Hancock, Prudential and AIG have recently settled with state officials on the issue, or have taken charges against earnings out of concern of potential liability.
Thirty-seven states have retained an outside firm, Verus, to examine the books of insurers representing 92 % of industry assets in order to determine whether they are complying with unclaimed property laws.
Verus is using the DMF to pore over the records of these insurers to see if they are turning over the funds to the state based on state law.
In fact, state officials in New York are double-teaming the issue. The state Department of Financial Services is investigating all life insurers in the state on the issue, and the state comptroller and attorney general have launched a separate probe, subpoenaing the records of the state’s nine largest insurers.
Insurers have complained that the death master file contains inaccuracies and Johnson, in convening the hearing, appears to acknowledge that.