Insurance Technology Featured Article

NY Families Get Life Insurance Pay Outs After Investigation

April 24, 2012

New York’s Department of Financial Services found some life insurance companies failed to pay out policies when the beneficiaries failed to make a claim, according to a news release from Gov. Andrew Cuomo.

Some 7,525 New Yorkers are finding out they inherited assets, resulting in 32,715 payments nationwide totaling $262.2 million to beneficiaries who didn’t know their family member had a policy to claim. The awards added up to $95.9 million in New York State alone.

The DFS investigation found that many insurance companies did not use the U.S. Social Security Administration’s Death Master File, a list of recent deaths, to pick out policyholders who had died and whose beneficiaries were due payments. The state subsequently ordered insurers to check their policy rolls against the file.

More payments may be on the way. Insurers have reported cross-checking about 89.58 million records, but they are still examining over 445,000 potentially unpaid claims.

“This investigation makes it perfectly clear that something must be done to make sure families across New York receive the life insurance benefits that they are due," Governor Cuomo said. "In the wake of this investigation, New York will now mandate that insurance companies actively search the list of recent deaths so money will be paid to beneficiaries instead of being trapped in limbo and a new website will help families search for lost or forgotten policies."

“There is simply no reason why insurance companies shouldn’t be scrubbing their policy lists with the death-index database on a frequent basis,” DFS Superintendent Benjamin Lawsky said. “Running these computer matches isn’t much of a burden, and the benefits to consumers are significant.”

Insurers will search their records to determine the existence of a life insurance policy or annuity contract. The insurers will then electronically report the search results to DFS within 30 days, and DFS will notify requestors whether or not a policy has been identified by any licensed insurer. If a policy is identified, the insurer will begin the claims process for paying proceeds to beneficiaries.




Edited by Braden Becker

Article comments powered by Disqus

Related Insurance Technology Articles

American National Insurance Company Selects iPipeline Solution

iPipeline, a company that offers on-demand marketing, selling, and processing solutions, recently announced that its AFFIRM for Annuities solution has been selected by American National Insurance Company, a provider of life and annuities products, to automate the advisor selling process. By supporting the customized workflows and streamlining the order-entry process, the solution allows financial institutions to meet their requirements for FINRA, SEC and state compliance. [ Read More ]
08/26/2014

Maryland Health Care Website to be Rebuilt

The rollout of the Affordable Care Act last year, known more widely as Obamacare, was driven, in part, by the accompanying website, Healthcare.gov. The national site ran into major technical problems from its inception, and the state exchange sites that worked alongside it were often no better. Many crashed because of server load malfunctions, and they ended up providing users with poor overall experiences that ultimately hindered, more than helped, their access to proper healthcare. [ Read More ]
08/21/2014

Summer Camp: A Paying Gig for Young App Testers

For most people, the thought of summer camp involves nature trails, canoeing, and for those of us raised on summer camp movies, payback delivered to the snooty camp across the lake or even burgeoning romance. But one summer camp actually puts young people's imaginations to work by testing apps and the like, and even going so far as to pay said young people for the time and effort involved. [ Read More ]
08/18/2014

Cyber Risk Insurance - Bridging the Gap between Insurance Providers and Companies Insured

The hottest topic in the insurance world today is "cyber risk insurance", or coverage for the response to and fallout from cyber crime and breaches. As Reuters recently highlighted, the cyber insurance market is set to double in 2014 over 2013 - heady times indeed for a traditionally slow-growth industry in search of new markets. [ Read More ]
08/14/2014
FREE Insurance Technology enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!