News: 2012 Press Release
For Release: February 15, 2012
Media Calls Only: 916-492-3566
"Death Master" Settlement Becomes Effective as 20th State Signs Agreement with Prudential Insurance Company
20th State Enters $17 Million Agreement Less Than Two Weeks after Initial Announcement
Insurance Commissioner Dave Jones today announced that 20 states have now signed a multi-state agreement that the California Department of Insurance (CDI) and six other lead states, negotiated with Prudential Life Insurance Company Group (Prudential). Through a multi-state effort, the lead states are examining a number of life insurers to determine whether they selectively used the Social Security Death Master File to cut off annuity payments when an annuitant died, but not to pay life insurance proceeds when a life insurance policyholder died. Prudential is the first insurer to settle.
"I'm pleased that this settlement agreement is now in full effect," said Commissioner Jones. "Prudential Life Insurance Company should be commended for entering into this settlement and for using all means available to pay death benefits. When shopping for life insurance, consumers and their dependents should know that Prudential Life Insurance Company will take those steps called for by state insurance regulators to use all means available to pay death benefits. It is our hope that other life insurers will follow the positive example set by Prudential Life Insurance."
"I'm proud of Pennsylvania's role as the lead coordinating state in this matter. This settlement, however, was the result of a truly collaborative effort between state insurance regulators across the country and serves as a positive example of the coordinated market conduct efforts of our state-based insurance system," said Pennsylvania Insurance Commissioner Michael F. Consedine.
The settlement agreement requires Prudential regularly to check the Social Security Death Master File to determine whether any of its life insurance policyholders, owners of annuities, and holders of retained asset account have died. If Prudential finds that a policyholder has died, the agreement requires Prudential to conduct a thorough search for beneficiaries, using all contact information in its records and online search and locator tools. If beneficiaries cannot be located, Prudential must turn the proceeds owed to beneficiaries over to the states as required by state unclaimed property laws.
The agreement requires Prudential to pay $17 million collectively to the states participating in the settlement. California's share of the settlement has not yet been determined, but is expected to be approximately $1.6 million. Benefits owed to beneficiaries will be paid once they have been located. Paid benefit amounts will be determined according to the terms of each individual policy.
The agreement became effective today after Kentucky signed it as the 20th state. Florida, Illinois, New Hampshire, North Dakota, Pennsylvania and New Jersey were the other lead states.
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