States wrote another chapter in their series of multistate life insurance settlements regarding the use of the Death Master File (DMF) database with Netherlands-based Aegon’s agreement to pay $11.2 million to insurance regulators.
Under the agreement, the company and its affiliates will complete one full comparison of all policyholders against the DMF and will enhance procedures to conduct more thorough searches for beneficiaries, among other business practice reforms.
The goal is to search the DMF records for deceased life insurance policyholders so that its beneficiaries may be paid.
The principal lead state in this investigation was Illinois with support from insurance regulators from Florida, California, Connecticut, New Hampshire, Pennsylvania and North Dakota. Iowa and Vermont contributed to the investigation as states where Aegon is domiciled.
Settlements arise alongside the state settlements and stem from the somewhat prevalent practice across the industry of using the DMF only when it suits the company, as has been alleged.
How often should insurers be checking the DMF? Some states like Kentucky and Tennessee and Maryland have gone ahead with he National Conference of Insurance Legislators (NCOIL)’s model legislation for periodic checks every few months. Some states are twice per year.
But, for the companies that have settled, like Aegon, the DMF search requirement is usually use of the full DMF at least once per year, and then the DMF monthly-update file at least 3 times per year, noted one person familiar with the states’ laws.
A number of other large life insurers, including life insurance giant New York Life, continue to be the subject of investigation by state insurance regulators, according to the California Department of Insurance (CDI).