State announces multimillion-dollar settlement with Aviva

Settlement represents the 4th where Illinois Dept. of Insurance was the lead

[November 25, 2013]  CHICAGO — Last week, Illinois Department of Insurance Director Andrew Boron announced an agreement with Aviva Life & Annuity Co. and Aviva Life & Annuity Co. of New York, collectively known as Aviva, as part of a multimillion-dollar settlement with several states regarding Aviva's use of the Social Security Administration's Death Master File. Under the settlement, Aviva will pay $4 million to states that are a party to the settlement.

This settlement with Aviva stems from multistate market conduct examinations of the 40 largest life insurers regarding the timely payment of proceeds to beneficiaries of life insurance policies and annuities. The principal lead state in this investigation was Illinois, with support from insurance regulators from Florida, California, New Hampshire, Iowa, North Dakota and Pennsylvania.

"With this settlement, there have been 10 resolutions with insurers that have agreed to implement consumer-friendly practices to timely pay benefits rightfully owed to beneficiaries," said Boron.

After the settlement with Aviva was negotiated, Athene Holding Ltd., known as Athene, announced it had completed the acquisition of Aviva. In connection with the acquisition, Athene sold Aviva's life insurance business to Presidential Life Insurance Co. – USA, a wholly owned subsidiary of Commonwealth Annuity and Life Insurance Co. and part of the Global Atlantic Financial Group. Promptly after Commonwealth's acquisition of the common stock of Presidential Life from Athene, Presidential and First Allmerica Financial Life Insurance Co. will together, as the Global Atlantic Insurers, reinsure all of the life insurance business of Aviva in a bulk reinsurance transaction.

Under the agreement, Athene and the Global Atlantic Insurers will implement business reforms with respect to the purchased Aviva entities and the reinsured life business to promote a timely and efficient search for the beneficiaries of both its in-force life insurance policies and annuities using the Social Security Death Master File. These companies will regularly match all of Aviva's insureds and annuitants against the DMF to help promptly identify when an insured has died, to locate and make payment to beneficiaries.

Market conduct examinations of seven of the 10 largest insurers in the United States have been resolved. These life insurers, and the other smaller insurers who have settled, represent more than 50 percent of the market, and the resolutions demonstrate that there is a sea change in the industry to properly and fairly use the DMF.

A copy of the Aviva settlement agreement (PDF) and the ancillary agreement (PDF) with Global Atlantic are both available on the Department of Insurance website at http://insurance.illinois.gov/Home/ImpLinks.asp. Consumers who have any questions regarding this settlement, or who have 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]