Insurance Department reaches multi-state settlement with AIG
Posted on 10/22/2012
BISMARCK, N.D.-North Dakota Insurance Commissioner Adam Hamm announced today that the North Dakota Insurance Department has reached another multi-state settlement agreement dealing with life insurance practices. As part of an $11 million settlement with American International Group, or AIG, North Dakota will receive an estimated $166,659.
AIG was the target of a multi-state examination to look at how the company used information from the Social Security Administration's Death Master File (DMF) to locate information about deceased policyholders. Normally, life insurance claims are filed by beneficiaries, but in a small percentage of cases, the insured's family is unaware of a policy and does not make a claim. Life insurance companies commonly use the DMF to find out if policyholders have died.
"AIG has agreed to step up their business practices to locate life insurance beneficiaries," Hamm said. "This settlement will return money to insurance consumers, and was successful thanks to the strong collaboration of state insurance regulators as well as the cooperation of AIG."
North Dakota is one of six lead states that have joined together through the National Association of Insurance Commissioners' Task Force to change the way life insurance companies handle claims when the companies have evidence that an insured has died. Many of the largest companies in the industry are agreeing to search proactively for beneficiaries of life insurance policies. The other lead states include California, Florida, Illinois, New Hampshire and Pennsylvania.
North Dakota was also part of another recent multi-state settlement with an insurance company regarding life insurance practices. A $7.2 million settlement with Nationwide Life Insurance Company will result in North Dakota receiving an estimated $162,155.
Consumers with questions about the settlement are encouraged to call the Department at 1-800-247-0560.