ALBANY – The Department of Financial Services (DFS) has put in place new regulations that require all life insurers doing business in New York to regularly search a government list of recent deaths to identify deceased policyholders and then find and pay beneficiaries of policies for which no claims have been made.
Last July, the DFS initiated an investigation into life insurers claims practices that has resulted in 32,715 payments of $262.2 million to consumers nationwide, including 7,525 payments totaling $95.9 million to New Yorkers. New York was the first state to order the cross-check policy, but that order only applied to policies in existence at that time.
“People sacrifice to buy life insurance to help their loved ones after their death, so it’s reasonable to make sure their families actually receive the benefits when they are eligible. Our investigation clearly proved that life insurers should be checking the list of recent deaths as a standard practice to find out when benefits may be due,” Governor Andrew Cuomo said.
Benjamin M. Lawsky, Financial Services Superintendent, said, “Insurance companies will now be matching their life insurance policy lists with the death index database on a regular basis. Conducting computer matches isn't much of a burden and the benefits to consumers are significant. With these matches and with New York’s new free online Lost Policy Finder, we have substantially reduced the chances of life insurance policies not being paid when someone dies."
The new regulation requires insurers to implement reasonable procedures to identify unclaimed death benefits, locate beneficiaries, and make prompt payments. Insurers must:
· Cross check their policies at least every three months with recent deaths using the Social Security Master File of deaths or another database acceptable to the Superintendent of Financial Services.
· When a policy is sold, request more detailed beneficiary information, such as social security number and address, to facilitate locating and making payments to beneficiaries when a death occurs.
· Search for multiple policies on the same person in the files of all insurers owned by a holding company.
· Cross-check policies with consumer requests received through the State’s new Lost Policy Finder, a free on-line service, located at www.NYPolicyFinder.com, to help consumers locate life insurance policies that have been lost or misplaced.