A $3.2 million multistate market conduct examination settlement agreement has been reached with Sun Life Insurance Company. As part of the settlement, Sun Life has agreed to a number of business practice reforms concerning its use of the Social Security Death Master File database. Sun Life joins 13 other life insurers that agreed to reform business practices to use the Death Master File database to search for deceased policyholders and make benefit payments.
The Death Master File lists the names of all decreased with social security number. Often, after the death of a loved one, the survivors may not know of all insurance policies. Losing a loved one, can send families into an emotional tailspin and making sure all life insurance policies are notified is not always available to the loved ones.
California’s insurance commissioner, Dave Jones, announced that as part of the settlement Sun Life will now proactively search the database in order to notify surviving beneficiaries of the decedents’ policies.
According to insurancenewsnet.com, in some cases, the research showed that insurance companies were actively searching the death master file but they were using the database for their benefit only. For example, using the database only to identify the deceased to cease
annuity payments.
For decades, the social security administration has maintained what is now the limited access death master file. The File is a considered a public document under the Freedom of Information Act. The official database contains over 86 million records created from SSA payment records. This file includes the following information on each decedent, and usually includes the social security number, name, date of birth, and date of death.
The database can also be used as a tool to prevent identity fraud. According to the SSA, by methodically running financial, credit, payment, and other applications against the Limited Access DMF, the financial community, insurance companies, security firms and state and local governments are better able to identify and prevent identity fraud.
While the insurance commissioner is holding Sun Life and other carriers accountable, policyholders must be proactive in getting their affairs together when death is the furthest thing from their mind. Make sure you have a trusted representative assisting your affairs and let your family members know where to find important documents.