Under intense pressure from industry and Congress, the Department of Commerce (DOC) plans to publish an interim rule Wednesday that will ensure seamless access to the Social Security Death Master File (DMF) for legitimate users.
The National Technical Information Service (NTIS) is establishing a temporary certification program for subscribers to the DMF.
The program is being established through an interim final rule (IFR) that will be published in the Federal Register Wednesday, March 26, 2014, and will be effective that day, according to an industry official.
“The DMF Coalition is grateful to NTIS and the Department of Commerce for their efforts to maintain access to the Death Master File for legitimate users,” said Michael Freedman, founder of Sentinel Solutions in Philadelphia and spokesman for a broad group of businesses in the U.S. that use the DMF regularly.
Freedman said that once this initial self-certification process is completed, “we look forward to working with the agencies and other interested parties in the development of the regulation. We’re definitely off to a good start.”
The IFR invites public comments on the temporary certification program, and sets a 30-day comment period, Freedman said. He said the IFR may be reviewed at the NTIS website, and added that, “If there are any inconsistencies between this document and the version published in the Federal Register, the version published in the Federal Register governs.”
The issue stems from an obscure provision of the recent Budget Act which limits public access to the DMF effective March 26. It requires DOC through NTIS to develop a certification program to allow persons meeting certain criteria to have continued access to the DMF.
The issue is a critical one for insurers, as noted in a January letter to the NTIS by Benjamin Lawsky, superintendent of the New York Department of Financial Services. The American Council of Life Insurers has also written a comment letter noting the urgency of the issue.
In a recent letter to the DOC and NTIS as well as the Office of Management and Budget, a bipartisan group of members of Congress also supported prompt action to ensure seamless access for legitimate users of the DMF.
That’s because insurers are forced through an enforcement agreement with 44 states perform regular cross-checks of the DMF to identify life insurance policies for which no claims have been made, and to locate beneficiaries eligible to receive benefits. The enforcement agreement stems from a probe first started in 2008 by California Controller John Chiang that insurers were using the DMF on an “asymmetric” basis, that is, many insurers regularly accessed the DMF in order to promptly cease making annuity payments to individuals, but most insurers were not similarly accessing the DMF to determine whether death benefits under life insurance policies should be paid to beneficiaries.
Under the temporary certification program established under the IFR, access to the “Limited Access DMF” will be limited to those certified under the program. The Limited Access DMF will provide decedent information during the three-calendar-year period following that individual’s death.
According to the interim provision, subscribers must have a legitimate fraud prevention interest, or have a legitimate business purpose pursuant to a law, governmental rule, regulation, or fiduciary duty in order to be certified under the program, Freedman said. Certification will be mandatory for continued access to the DMF.
The certification form can be downloaded at http://www.ntis.gov/pdf/dmf-certification.pdf.