Nationwide settles DMF case with state insurance departments

“This settlement is another important step in our effort to reform industry practices regarding the use of the Social Security Death Master File database,” said Commissioner Jones. “As other insurers have done, Nationwide selectively used the Death Master File database to cut off payments to annuity holders but did not use that database to identify deceased life insurance policyholders and pay their beneficiaries. This settlement ends that practice. I strongly encourage other insurers to come forward and enter similar agreements. Beneficiaries of deceased policyholders should receive their payments immediately.”

Commissioner Jones’ imploration may be effective; prior to Nationwide reaching a settlement, California and other states were able to reach settlements with Prudential for $17 million and MetLife for $40 million.

In a statement this afternoon, Mike Switzer, a Nationwide Financial spokesman said, “Nationwide Financial is pleased to have reached an agreement with the Florida Office of Insurance Regulation and the other states involved in this exam regarding our continued use of the Social Security Death Master File in order to indentify potentially deceased policy holders and initiate the claims process. Nationwide agreed to a $7.2 million settlement for the Market Conduct Exam. As part of this process, Nationwide has identified and paid approximately $144 million in benefits to life and annuity beneficiaries who had not previously filed claims. After fully cooperating in this process, we look forward to fulfilling the terms of this agreement and moving forward with this matter resolved.”

Today’s settlement becomes effective when 14 additional state insurance departments sign on.