2/3/2012 1:30 PM ET|
How insurers use the 'Death Master'
A Social Security file with data on 95% of Americans who have died over the past 75 years can help with unclaimed benefits -- if life insurers choose to consult it.
The file is a who's who of about 95% of Americans who have died over the past 75 years. It includes dates of birth and death, Social Security numbers and even ZIP codes.
Insurers can use the list to find out if a life insurance policyholder has died, at which point they must pay the beneficiaries. According to Florida, California and New York regulators investigating the insurance industry, many insurers have not consulted the file, leaving it up to beneficiaries to track down the policies and claim their money.
In 2011, this came to light when Florida Insurance Commissioner Kevin McCarty asserted that life insurers had held back $1 billion that could have gone to beneficiaries if insurers had only checked the Death Master File to learn whether their policyholders had died. Other insurance regulators quickly followed up. Life insurers already have paid nearly $53 million as a result, according to a statement released by New York State Department of Financial Services Superintendent Benjamin Lawsky.
"Regulators are using the bully pulpit to encourage life insurers to be proactive in starting the claims process," says Wayne Landesman, a former president of the Buffalo Association of Insurance and Financial Advisors.
Social Security Administration reacts
But it looks as if there will be a reversal in beneficiaries' good fortune. As of Nov. 1, 2011, the SSA no longer discloses what it calls "protected state records" of deaths -- essentially any records it acquires from the states, to insurance companies or the public. The decline in the size of the Death Master File is substantial; 4.2 million of its 89 million records will be excised from the public files and made available only to federal agencies.
And of the 2.8 million deaths reported to the file each year, only 1 million will be available to the public. In other words, most recent deaths won't be reported. And that will make it harder to figure out who is owed life insurance money.
Why the change? The SSA says it has discovered it is prohibited from disclosing death records it receives through contacts with the states, according to the SSA website. But the Death Master File has been in existence since around 1980. SSA spokeswoman Kia Green offered no comment on why it had taken the SSA so many years to discover it was doing something wrong.
A magnet for criminals?
Recent attention drawn to the Death Master File by state regulators has made it an attractive resource for criminals seeking personal information for use in scams, says Jamie May, chief investigator at AllClearID.com, an identity theft protection website.
"Thieves are pocketing fraudulent tax refunds after filing returns with personal information about recently deceased children that they found in the Death Master File," says May. "Armed with the deceased child's Social Security number and other personal information, the crooks falsely claim them as dependents."
Insurance regulators are continuing to press life insurers to use the Death Master File, even though information will be limited.
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insurance companies profit by collecting premiums and doing everything possible right up to the very edge of the legal line to make sure they pay out as little as possible in return. this is just another example, and you can be sure there was pressure from the insrance industries lawyers to create this never before realized infraction of rules to let insurance comapnies hide behind.
on the other hand, what's needed now is to create a law that forces insurance companies to make sure they're paying on life insrance policies by making it mandatory the insurance companies maintain at least annual contact with insureds and follow up if contact is broken off.
I swear, greed has no bounds in America, hell for enough money or cult of personality, you can watch children be raped and say nothing and still be hailed a hero.
Are you people for real!!!! You expect a life insurance company to know when YOUR loved one dies. You have a personal relationship with them and as such should know they have a policy. The policy makes it the beneficiaries responsibility to contact them to place a claim. It's pretty obvious that you will know they have died far before the insurance company does. The list is kept by the government. Do you really expect it to be correct and up to date? Not to mention that hiring someone to check the list costs money and those costs are passed on to policy holders. Once again the stupid few that are not smart enough to understand it is their responsibility to do something simple will cost everyone else money.
Does anyone know which candidates campaign for President is backed by insurance corporations? That's probably the most dishonest politician... who might that be?
Informed voters want to know : )
You are laughable. Now I see I really shouldn't be responding to you at all, but I just can't help myself. Market research didn't do a bait and switch. He was just trying to use an example your tiny little brain might comprehend(doh... sorry for the big word, comprehend means understand, doh that's a big word too, sorry), but it didn't work. You are too blinded by what you think is a political divide between you and Republicans to read anything and learn from it. You just pulled the biggest bait and switch here by turning this into a political attack, Mr. hypocrite. Now please attack me, so I can't grind you into a pulp or the better choice would be to go sit in your corner and be quiet.
Yes. I am an insurance agent and yes I am a republican, but I'm not sure what that has to do with any of this.
In the real world responsible adults certainly discuss life insurance and their wishes of how things should be handled when they die with their families. Why would you pay lots of money for years on a policy knowing that when it's time to use it you won't be able to tell anyone you have it(because your dead). As for a computer system that monitors the list, that's a great idea, but it's just not that simple. The government is not going to allow thousands of insurance companies to monitor the list, which is what it would take to know every time someone is added, nor is the government going to send notice to every insurance company every time someone is added. It would take the government having a list of everyone that has a policy, with what company and notifying that company. Again not something I'm willing to pay for in taxes or increased premiums. It's also very, very, very uncommon to name anyone other than a spouse, child or trust as a beneficiary, so your niece remark just doesn't hold water. You obviously don't know anything about life insurance if you think you just name a bunch of people to get pieces of the death benefit.
As for trusting my government it's not really about that. I just don't see the need to add more burden when's it's not needed. Maybe that's where the Republican/Democrat comment comes into play. It seems that you can tell that I'm a republican, because I know I should be responsible for myself and you think the government should do everything for you. Gotcha.
I was an OSHA investigator for an insurance company. this is a fact, in an industrial accident, it is better for the the insurance company if you DIE!
The DEATH payout is less than hospital and rehabilitation costs!
Exactly where in the life insurance contract does it call for the company to keep calling to find out when its insured dies? That is up to the family to contact the carrier. Generally if there is not a family, whom ever is handling the closing of the estate would follow-up.
I'm not sure this article has anything to do with insurance companies being crooks. So I do not see why there are accusations of fraud here. If there is a legitimate claim it will be paid.
In the real world, people usually don't discuss life insurance with relatives or beneficiaries if you have a real personal relationship. Now if your a vulture then like "Mr. Scott said, "well dats different..." you just might be askin' that all important question like they do in staged life insurance ads on TV with actors, in reality, it's a morbid subject and not normally a subject that is discussed at the dinner table or ever for that matter.
"Oh my niece, I left you a little something when I kick off... so be sure and run like a banker and cash in."
Oh, and by the way, this is the computer/ information age, they don't need a "person" to do a search for beneficiaries, a computer program could automatically locate and inform the benefactors... if that's what they really wanted. Let's face it and admit it, that’s not really what they want to happen now do they, it would cut into their profits.
And, it sounds like you don't trust the Government; it almost sounds like you just might be a Republican and you might even work for an insurance company or own their insurance stock and you might contribute to an Insurance PAC of thieves.: )
Market Observer: This is life insurance we're talking about here NOT a car insurance policy. The dead don't call their insurance agent; and it's not reasonable to expect relatives to know someone has a LIFE INSURANCE POLICY. Let me explain it to you since you think "DEMS" are ignorant and you can do a bait and switch by changing the subject and avoid the issue like a Republican answering a question about his past finances or any other relevant question. That's important public information about character and integrity that should be considered when someone is running for office. The wealthy who think only of themselves and donate neither time nor money to non-profit organizations like the Salvation Army or the American Cancer Society and find ways to cheat on their taxes would be all for life insurance companies not paying out on a policy like they promised to the now dead person.
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