TALLAHASSEE, Fla. (Legal Newsline) - Florida Attorney General Pam Bondi announced a $40 million multi-agency settlement on Monday with nine Metropolitan Life insurance companies.
The settlement resolves issues pertaining to life and annuity beneficiaries and the reporting of unclaimed property. Under the terms of the agreement, MetLife agreed to do frequent comparisons of its policyholder information with its death master file.
If the company finds a policyholder has died, it will either pay the beneficiary or send the policy benefit to the correct unclaimed property department in one year's time. The agreement is a significant change in how willing life insurers are to find lost policies.
"Life insurance companies must do their due diligence to locate beneficiaries and pay them the amount agreed upon between the company and the policyholder," Bondi said. "In this settlement, MetLife agreed to take the appropriate steps to identify beneficiaries."
As part of the agreement, MetLife will adopt business reforms to improve efforts to locate policyholders and beneficiaries within 120 days of an insured's death, conduct quarterly matches for a year and monthly matches against the death master file to check for evidence that a MetLife policy holder may have died, and to search for insureds or beneficiaries of industrial or low-value life policies that were sold in the early 1900s through 1964.
If MetLife discovers that a policyholder has died, it will conduct a thorough search for the beneficiaries using mail, telephone calls, email and databases. The low-value policies, many of which were sold in Florida, will be sought out by MetLife to identify the beneficiaries of the policies. The industrial policies by themselves are estimated to be worth more than $9 million in face value to close to 15,000 Florida policyholders.
The agreement was coordinated with the insurance departments of North Dakota, New Hampshire, Pennsylvania, California and Illinois. An agreement related to the Fla. agreement will be signed by MetLife and Unclaimed Property officials in 30 states.
While the agreement does not change the underlying insurance policy and companies can continue to require beneficiaries to submit a death claim, it does show that companies are increasing their efforts to find people if they do not receive a claim soon after an indication that the insured may have passed away.
Pennsylvania, New Hampshire, North Dakota, Illinois, California and Florida are the lead states for examining the biggest insurance companies. The task force has focused on the largest 40 insurance groups, which make up 92.4 percent of the market for life and annuity products throughout the country.