This updates our May 3, 2011 blog post.

Several state regulators have joined together to form a special task force (“Task Force”) under the auspices of the NAIC to coordinate investigation of the claims procedures of certain life insurance companies.  In particular, states are examining the manner in which such companies investigate and determine whether a particular insured is deceased, and locate beneficiaries.  The investigations come in response to concern that certain companies have failed to pay out death benefits to beneficiaries, or to the state if no beneficiary can be located, operating under the premise that they had no obligation to do so until the beneficiaries or the estate of the insured made a claim.  Among the alleged practices include use of the Social Security Administration’s Death Master File by insurance companies for purpose of ceasing annuity payments, but failure to use such information to facilitate the payment of death benefits on life insurance policies.  See NAIC press release announcing creation of the Task Force for details.

Florida currently chairs the Task Force.  Other members of the Task Force include California, Illinois, Iowa, Louisiana, New Hampshire, New Jersey, North Dakota, Pennsylvania and West Virginia.  The Task Force is coordinating with Florida and California with respect to their upcoming public hearings scheduled for May 19 (click here for public hearing notice) and May 23 (click here for public hearing notice), respectively.  The Florida hearing will be broadcast live today.

We will continue to monitor this topic and post further updates on InsureReinsure.com.