State insurance regulators have formed a task force through the National Association of Insurance Commissioners to coordinate investigations into claim settlement practices of life insurance companies.
The regulators are investigating the possible failure of some large life insurance companies to pay death benefits to policy beneficiaries. Under scrutiny is the alleged practice by some insurers of using the Social Security Administration's Death Master File to terminate payments under annuity contracts, but failing to use the same information to facilitate payment of life insurance claims.
"State regulators are committed to reviewing the full extent of these practices in the life insurance and annuity industry," NAIC President and Iowa Insurance Commissioner Susan E. Voss said in a press statement. "We intend to coordinate multi-state examinations to effectively utilize our state resources in achieving resolution of these issues."
Members of the new task force include insurance regulators from California, Florida, Illinois, Iowa, Louisiana, New Hampshire, New Jersey, North Dakota, Pennsylvania and West Virginia. The task force is coordinating joint public hearings on industry claims settlement practices, including a May 19 hearing in Florida and a May 23 hearing in California.