Department of Insurance announces $500 million settlement with
MetLife
Illinois
led multi-state effort to examine use of Social Security records
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[April 24, 2012]
CHICAGO -- A six-state task force led
by the Illinois Department of Insurance announced Monday that the
states have reached a multimillion-dollar settlement with
Metropolitan Life Insurance Co. and its life insurance affiliates.
Under the settlement, MetLife and its affiliates agreed to pay more
than $500 million in life insurance benefits and also agreed to pay
$40 million to states that are a party to the settlement to pay for
stepped-up monitoring by the states.
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The settlement is a result of a multi-state examination, led by
Illinois, that investigated MetLife's use of the Social Security
Administration's "Death Master File" to confirm the death of its
deceased policyholders. The examination revealed that while MetLife
used information from the DMF to stop annuity payments to
policyholders, it did not use that information to identify
beneficiaries who may have been eligible for payment benefits under
life and endowment policies.
"As a result of the examination, MetLife has agreed to
fundamentally change its business practices to proactively seek,
locate and pay beneficiaries when MetLife knows a death has
occurred, and not just wait until a beneficiary contacts it," said
Andrew Boron, director of the Department of Insurance.
Under the agreement, MetLife has committed to building a system
that will match, on a monthly basis, all of its insureds under life
insurance and endowment policies against the information from the
DMF to help identify when an insured has died, and to promptly
locate and make payment to beneficiaries.
The settlement also requires MetLife to pay a total of $40
million to the states for examination, compliance and monitoring
costs. The $40 million will be shared by all states that join the
six lead states in signing the settlement agreement. In addition,
MetLife has agreed to early endow and pay $709,000 in-force
industrial life policies having a face value of $500 million.
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Boron commends MetLife's willingness to work with state
regulators and improve its business practices for the benefit of
consumers. He noted that the settlement was the result of a
collaborative effort of state insurance regulators "demonstrating
that state-based regulation is efficient and effective in protecting
consumer interests."
The agreement becomes effective after it is signed by 20 states.
California, Florida, New Hampshire, North Dakota and Pennsylvania
have signed the agreement as lead states along with Illinois.
A copy of the settlement agreement is available on the Department
of Insurance website,
http://insurance.illinois.gov/. Consumers with any question
concerning this examination, or who have any question 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]
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