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.
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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.
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By GlobalData
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.
MetLife response
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.
