RiverSource Life to Pay $1.5 Million as Part of Death Master File Settlement
January 31, 2017 by Thomas Harman
SACRAMENTO, Calif. – RiverSource Life Insurance Co. has agreed to pay multiple states a combined $1.5 million settlement agreement and to use the Social Security Death Master File database to identify life insurance policyholders to search for beneficiaries owed benefits.
The Florida Office of Insurance Regulation said the settlement agreement focused on the practice of using the Death Master File to stop payment of a deceased person’s annuity, but not using it to find and pay the deceased’s family or other beneficiaries.
The settlement with RiverSource Life, a subsidiary of Ameriprise, means state insurance regulators have either reached settlements or concluded the investigation of 28 of the 40 largest life insurers. The various settlements have resulted in payments of $7.3 billion to life insurance beneficiaries nationwide, according to a statement from the California Department of Insurance.
The settlement covers the costs of investigations and future compliance monitoring, according to the OIR. Florida’s share of the Ameriprise payment is more than $111,000.
“Ameriprise has set a great example through the examination process by fully cooperating and agreeing to change their practices to benefit their policyholders,” said California Insurance Commissioner Dave Jones.
RiverSource Life denied any wrongdoing but wished to resolve the examination to avoid long-term litigation and/or administrative proceedings that would be otherwise necessary to resolve the dispute. “We’ve improved our claims handling processes over the years and we are confident we have the systems and controls in place to meet evolving regulatory expectations,” the company said in a statement.
RiverSource Life will continue to compare all insureds in company records against the complete Death Master File annually and against any updates to the file at least every quarter. If beneficiaries do not contact the company within 120 days of receiving a death notice, RiverSource will conduct a one-year search for the beneficiary, after which any unclaimed property will be remitted to the states.
The settlement concludes a multistate examination of RiverSource that began in 2014, according to the settlement agreement. The lead states — California, Florida, Pennsylvania, New Hampshire and North Dakota — have been conducting investigations of companies’ use of the Death Master File for six years (Best’s News Service, May 2, 2011). The RiverSource settlement agreement would take effect on March 31 if the lead states and 18 participating states execute agreement by that date.
The CDI said examination of the remaining 12 insurers continues. They are Northwestern Mutual, Great West, Protective Life, American Equity, State Farm, Aflac, Principle Financial, Allstate, Western Southern, OneAmerica, Ohio National, and American National. The top 40 insurers chosen for investigation were based on 2010 NAIC Annual Reports for Direct Life, Annuity and Other Considerations, the CDI said.
RiverSource Life Insurance Co. has a Best’s Financial Strength Rating of A+ (Superior).
(By Thomas Harman, Washington Bureau manager, BestWeek: Tom.Harman@ambest.com)
