Department of Insurance announces multimillion-dollar settlement with TIAA-CREF

Illinois led multistate effort to examine payment of life insurance benefits

[June 26, 2013]  CHICAGO -- Illinois Department of Insurance Director Andrew Boron has announced an agreement with Teachers Insurance and Annuity Association of America and TIAA-CREF Life Insurance Co., collectively TIAA, as part of a multimillion-dollar settlement with several states. Under the settlement announced Monday, TIAA agreed to change business practices related to the payment of life insurance benefits and also agreed to pay $6,200,000 to states that are a party to the settlement.

Illinois, along with six other lead states, initiated discussions with the company regarding compliance in its practices and procedures for identifying and paying proceeds to beneficiaries of life insurance policies and annuities. After conducting a multistate examination investigation, a "Regulatory Settlement Agreement" was reached.

"We were able to reach a settlement agreement quickly because of TIAA's cooperation in this multistate examination," said Boron. "I want to express appreciation for TIAA's continuing efforts to reform its business practices of locating beneficiaries and to pay benefits owed."

Under the agreement, TIAA will implement business reforms to promote a timely and efficient search for the beneficiaries of its in-force life insurance policies and annuities. The company will regularly match all of its insureds and annuitants against the Social Security Administration's Death Master File to help promptly identify when an insured has died, to locate and make payment to beneficiaries.

The Department of Insurance general counsel, Mary L. Smith, also commends state regulators who collaborated to reform TIAA's practices.

"The efforts of fellow lead states have resulted in a sea change in the way that insurance companies locate policy beneficiaries and make prompt payment of life insurance proceeds to those rightfully owed," Smith said.

The agreement becomes effective after it is signed by the seven lead states plus 13 other states. In addition to Illinois, the lead states of California, Florida, New Hampshire, North Dakota, Pennsylvania and Florida have signed the agreement.

A copy of the settlement agreement is available on the Department of Insurance website at http://insurance.illinois.gov/Home/ImpLinks.asp or by clicking here (PDF).

Consumers who have any questions regarding this settlement, or any questions or concerns about their insurance, should contact the department's Consumer Division at http://insurance.illinois.gov/ or call 866-445-5364.

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