California’s state controller John Chiang has said a multi-state settlement with US-headquartered life means the insurer MetLife will pay an estimated $500m in unpaid life insurance and annuity benefits to beneficiaries or states acting on their behalf.
However, MetLife said it will pay out about $438m to policyholders over the next 17 years, and it expects to pay out to $188m to beneficiaries this year.
The settlement came after Chiang and insurance commissioner Dave Jones jointly held an investigative hearing in May 2011 regarding MetLife’s use of the Social Security Administration’s “Death Master File,” which is a database of deceased individuals.
The California State Controller’s Office said this revealed MetLife had information about the deaths of life insurance policyholders from the Death Master File, but did not use that information to pay benefits.
John Chiang, California state controller
The hearing also confirmed that MetLife was not forwarding the life insurance benefits as “unclaimed property” to the State Controller after three years, as required by state law, said the controller’s office.
Commenting on the settlement, MetLife said it has undertaken a variety of proactive steps over many decades to locate the small percentage of policyholders who have lost contact with the company, including using the Social Security Death Master File as part of this process to match virtually all of its administrative records in 2011.
The company said it agrees that periodic matching of administrative records against available external sources such as the Social Security Death Master File is a best practice.
MetLife added that it is implementing a monthly matching process which it believes will be effective in identifying the small proportion of deaths where a claim is not submitted.
The provider also said it has created an online system to help customers find their policies.