Department of Insurance announces multimillion-dollar settlement with Nationwide

Illinois participated in multistate effort to examine payment of life insurance benefits

[October 15, 2012]  CHICAGO -- Illinois Department of Insurance Director Andrew Boron announced last week that an agreement has been reached with Nationwide Life Co. and its life insurance affiliates as part of a multimillion-dollar settlement with several states. Under the settlement, Nationwide and its affiliates agreed to change business practices related to the payment of life insurance benefits and also agreed to pay $7,200,000 to states that are a party to the settlement.

The settlement agreement is the result of a multistate investigation of Nationwide's practices and procedures for identifying and paying proceeds to beneficiaries of life insurance policies and annuities. Illinois, along with six other lead states, initiated discussions with the company regarding compliance and the need for reform. Since the multistate examination began, Nationwide has identified 4,747 unclaimed death benefits, and had already paid $144.1 million to beneficiaries. The settlement also provides for the payment that is to be allocated among states signing the agreement.

"This settlement is an important step forward in protecting Illinois consumers with respect to the payment of life insurance proceeds and provides for the adoption of proscriptive business practices to ensure that death benefits are timely paid," said Boron. "This Nationwide agreement is the third national agreement, including the MetLife settlement led by DOI and announced in April 2012, which reflects a joint commitment by state insurance regulators to protect policy beneficiaries and consumers in the payments of benefits rightfully owed."

Under the agreement, the four Nationwide companies -- Nationwide Life Insurance Co., Nationwide Life and Annuity Insurance Co., Nationwide Life Insurance Co. of America, and Nationwide Life and Annuity Insurance Co. of America -- collectively known as Nationwide, will implement business reforms to promote a timely and efficient search for the beneficiaries of its in-force life insurance policies and annuities through regular matches of its insureds and annuitants against the Social Security Administration's Death Master File.

The agreement becomes effective after it is signed by 20 states. Illinois, along with California, New Hampshire, North Dakota, Ohio, Pennsylvania and Florida, which lead the examination, have signed the agreement.

A copy of the settlement agreement is available at http://insurance.illinois.gov/. Consumers who have any questions regarding this settlement, or who have any questions or concerns about their insurance, should contact the Consumer Division of the Illinois Department of Insurance at http://insurance.illinois.gov/ or call 866-445-5364.

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The mission of the Illinois Department of Insurance is to protect consumers by providing assistance and information, by efficiently regulating the insurance industry's market behavior and financial solvency, and by fostering a competitive insurance marketplace. The department assists consumers with all insurance complaints, including health, auto, life and homeowner.

[Text from Illinois Department of Insurance file received from the Illinois Office of Communication and Information]