Symetra to Pay $1.2 Million to States in Latest Death Master File Settlement Pact
November 26, 2014 by Thomas Harman
SACRAMENTO, Calif. – Symetra Life Insurance Co. and Symetra National Life Insurance Co. have reached a $1.2 million multistate market conduct agreement to reform business practices when using the Social Security Death Master File database.
Symetra becomes the 15th life insurer that has agreed to such reforms when using the database in order to search for deceased policyholders and to make benefit payments. The settlement is the latest in the efforts by California and other states to ensure life insurance companies comply with the Unfair Claims Settlement Practices Act.
Regulators, led by the National Association of Insurance Commissioners’ life/annuities claim settlement practices task force, have been conducting the multistate examination process since it was established in 2011. To date, more than $1 billion has been returned to beneficiaries as a result of the various investigations and another $1.7 billion has been returned to states’ unclaimed property bureaus while they search for other beneficiaries.
States are investigating the nation’s top life insurers to improve life insurer payment of benefits using the DMF. Some regulators have argued life insurers have not done their best to determine whether they had outstanding obligations to pay beneficiaries once a policyholder dies.
According to a statement by the Florida Office of Insurance Regulation, Symetra has agreed to reform the business practice in which the company has stopped paying a deceased person’s annuity, but has not used the DMF to find and pay the deceased’s family or beneficiaries of life insurance policies. Symetra denied any wrongdoing in the agreement and said they have already completed comparisons of the complete DMF to their policyholder lists as a good faith effort to locate policyholders and beneficiaries, the OIR statement said.
The settlement agreement requires Symetra to compare all company records against the DMF update file monthly to identify matches for potential unclaimed death benefits; report and remit proceeds of unclaimed benefits as unclaimed property to states within three to five years; and provide quarterly reports to lead states about the implementation and execution of the agreement for the next two years.
California Department of Insurance spokesperson Madison Voss told Best’s News Service the agreement contains a provision in which Symetra agreed to undergo another market conduct examination within 39 months’ time.
Symetra made the $1.2 million payment to the states who were involved in the examination, with California being the lead state, along with Florida, Illinois, New Hampshire, North Dakota, Pennsylvania and Washington state. Part of the payment will be used by the states to cover investigation costs and to monitor Symetra’s compliance with the agreement, said Voss.
The Symetra agreement follows by less than two weeks a $3.2 million settlement between Sun Life Co., and lead state Florida, along with California, Connecticut, Illinois, Michigan, New Hampshire, North Dakota and Pennsylvania to settle life insurance claims. Sun Life agreed to compare all company records against updated DMF monthly files and against the complete DMF annually to identify matches for potential unclaimed death benefits (Best’s News Service, Nov. 13, 2014).
Symetra Life Insurance Co. currently has a Best’s Financial Strength Rating of A (Excellent).