Minnesota Commerce Commissioner Mike Rothman announced that his department has reached settlement agreements with three more life insurance companies that owed money to Minnesotans for unpaid insurance policies, annuity contracts and retained asset accounts.
The settlements bring to $174 million the amount in unpaid benefits the state’s insurance regulators have uncovered so in examinations of 16 life insurance companies.
The insurance companies are required to make good on unpaid benefits going back to 1990 and reform their claims practices going forward.
“Minnesota consumers have the right to the unpaid insurance money due to them,” said Rothman, whose agency regulates insurance companies doing business in Minnesota. “Under the settlements, these life insurance companies must honor their payment obligations to our consumers.”
The latest settlements are with AXA Equitable Life Insurance Company, Jackson National Life Insurance Company and New York Life Insurance Company.
The Minnesota Commerce Department has now reached similar agreements with a total of nine life insurance companies. Previous settlements involved John Hancock, Lincoln, MetLife, Prudential, Transamerica and Voya (ING). The agency also continues to investigate claims and payment practices at seven other life insurance companies.
As a result of the agreements and ongoing examinations, at least $143 million in claims owed on Minnesota policies are being paid directly to beneficiaries. An additional $31 million owed to beneficiaries who cannot be located will be transferred to unclaimed property programs in Minnesota and other states, which hold the funds in trust until claimed by the rightful owners or their heirs.
The nine insurance companies have also made a total of $12.6 million in settlement payments to the State of Minnesota.
The settlements are the result of sweeping “market conduct” examinations by the Commerce Department to identify unpaid life insurance policies and annuities owed to Minnesotans.
These examinations determined that the insurance companies had inadequate information and procedures for identifying policyholders and beneficiaries who may be owed benefit payments. This included failure to regularly match their policy records against the Death Master File, a database of deaths compiled by the Social Security Administration.
As a result of these deficiencies, the insurance companies in many instances failed to pay benefits to beneficiaries after policyholders had died.
Under the terms of the settlements, the insurance companies now must take additional steps to maintain accurate information, use the Death Master File and make timely payments to beneficiaries.
“I encourage Minnesotans to make sure their life insurance companies have up-to-date contact information for themselves as well as their beneficiaries,” said Rothman. “Many people are never told they are named as beneficiaries in life insurance policies, so they often have no idea an insurance payment is owed to them.”
Source: Minnesota Commerce Department