The Florida Office of Insurance Regulation (Office) along with the Department of Financial Services (DFS) and the Office of the Attorney General (AG) has announced a multi-million dollar settlement agreement with Prudential Insurance Company of America and its affiliates regarding the asymmetrical use of the Social Security Administration’s Death Master List. Prudential had been accused of using the list aggressively to determine when annuitants had died in order to cease payments, but not using the list as aggressively to determine when life insurance policyholders need to be paid.
As part of the agreement, Prudential agreed to pay a national $17 million settlement. It will also overhaul its computer system and revise its business practices to better utilize the Death Master File to identify life insurance beneficiaries. It will return monies promptly to beneficiaries when located through revised search efforts, and if a beneficiary cannot be identified, the amount due will be reported to the Unclaimed Property Bureau of the Florida DFS or the appropriate state unclaimed property office in accordance with state laws.
Prudential will also provide quarterly reports for the next three years to the Office, DFS and the AG with updates on information specific to Prudential’s implementation of the agreement.
The lead investigatory states were California, Florida, Illinois, Pennsylvania, New Hampshire, New Jersey, and North Dakota, and these states have all signed the agreement. For the agreement to become effective, a total of at least 20 states need to sign. All states have until March 31, 2012 to sign the agreement to become eligible to receive the distribution of the settlement payment.