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Insurance Department reaches $15 million multi-state agreement with New York Life
 
BISMARCK, N.D.—North Dakota Insurance Commissioner Adam Hamm announced today that a multi-state life insurance settlement has been reached with New York Life Insurance Company over the use of the Social Security Administration’s Death Master File (DMF) database. Of the $15 million total, North Dakota will receive $173,790.
 
As part of the settlement, New York Life has agreed to a number of business practice reforms, including using the DMF to search for deceased life insurance policyholders so beneficiaries are paid. State insurance departments in North Dakota, California, Florida, Illinois, New Hampshire and Pennsylvania worked together to examine the company’s practices.
 
“This settlement is yet another step in the right direction to reform the life insurance industry’s use of the Death Master File database,” Hamm said.
 
Life insurers have used the DMF for many years to search for and stop payments to annuity holders, but have not used the database to identify deceased life insurance policyholders to pay beneficiaries. It is estimated that through this practice (referred to as asymmetric use), insurers avoided paying billions of dollars in life insurance proceeds to beneficiaries and also failed to turn over unclaimed proceeds to state controllers. New York Life has demonstrated that it has been using the DMF symmetrically since regulators began examinations in 2011.
 
New York Life ranks third in sales of life insurance and annuities with over $21 billion in annual premiums. With this agreement, life insurers representing more than 50 percent of the total national market have conformed or agreed to reform their business practices.
 
The Department has been part of eight multi-state settlements with insurance companies regarding life insurance practices and to date has received more than $1.45 million. Consumers with questions about the settlement are encouraged to call the Department at 1-800-247-0560.
 
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North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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