State insurance regulators have reached a settlement with the Genworth Life Insurance Company over the insurer’s use of the Social Security Administration's Death Master File database. The settlement ensures protection for policyholders and beneficiaries.
"I am pleased with the outcome of this agreement as it is another success in our nationwide effort to reform life insurance industry practices regarding the use of the Death Master database,” said California Department of Insurance Commissioner Dave Jones. “I am steadfast in my commitment to consumers and will ensure companies make good on their promises to their policyholders."
Genworth, which has more than $3.5 billion in annual premiums, agreed to pay $1.9 million to state insurance departments; California will receive roughly $175,000 of the settlement amount. In addition, Genworth agreed to a number of business practice reforms, including using the Death Master File database to search its records for deceased life insurance policyholders so beneficiaries may be paid.
"Genworth has settled an industry-wide, multi-state Insurance Department market conduct examination of unclaimed life insurance benefits," a Genworth spokesperson states in a written response. "There is no commitment that Genworth takes more seriously than promptly paying claims to the beneficiaries of its life insurance policies.
"Over the years, Genworth has done everything the law requires to pay claims, and in most cases has gone beyond that standard," the spokesperson adds. "This agreement addresses the tiny fraction of life insurance benefits that have gone unclaimed over the years where deaths have not been reported to Genworth and beneficiaries have not come forward to claim life insurance benefits."
Illinois served as the lead state in the investigation of Genworth, with support from Commissioner Jones and insurance regulators in Florida, Delaware, New Hampshire, North Dakota, Pennsylvania and Virginia.
For many years, life insurers have used the Death Master File to search for and stop payments to annuity holders, but did not use the database to identify deceased life insurance policyholders whose beneficiaries are owed life insurance proceeds.