The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
TALLAHASSEE, Fla., Oct. 22 -- The Florida Office of Insurance Regulation issued the following news release:
Florida Insurance Commissioner Kevin McCarty announced today that an $11 million settlement has been reached with 10 companies collectively referred to as AIG. The agreement is the fifth agreement that Florida has settled that requires large national insurers to appropriately use the U.S. Social Security Death Master File (DMF) to locate life and annuity beneficiaries, and promptly remit payment to the unclaimed property division of each state for beneficiaries that cannot be located.
The agreement is between AIG and the Florida Department of Financial Services (DFS), overseen by Chief Financial Officer Jeff Atwater, the Florida Office of the Attorney General (AG), overseen by Attorney General Pam Bondi, and the Florida Office of Insurance Regulation (Office) along with other lead states of California, Illinois, New Hampshire, North Dakota, Pennsylvania, and Texas that also assisted in the investigation.
"We are pleased that AIG has signed this agreement, and pledged to fix its practices to appropriately identify deserving beneficiaries," stated Commissioner McCarty, "Momentum is building within the industry to change their practices, pay beneficiaries, and reach agreements with the appropriate regulatory jurisdictions to resolve issues surrounding past practices."
"This settlement is another big victory for Florida's consumers," CFO Atwater said. "In challenging economic times, each extra dollar in the pockets of Floridians can mean all the difference. We are holding companies accountable on their contracts with policyholders."
"This national settlement ensures that AIG pays benefits rightfully owed to beneficiaries in a timely manner, and it demonstrates our commitment to improving the handling of duly owed funds by the life insurance industry," stated Attorney General Pam Bondi. "This is Florida's fifth settlement of its kind, and we will continue to hold companies accountable."
As part of the agreement, AIG agreed to:
Perform comparisons of all in-force and lapsed insureds, accountholders, and annuity owners with a death benefit against the DMF within 60 days, and continue this practice on a monthly basis.
Establish procedures that a DMF listing is prima facie evidence of a death, and procedures to conduct a "Thorough Search" following the notification of such death.
For a period of 36 months, AIG shall provide to the lead states quarterly reports about the implementation and execution of the requirements of the agreement.
Thirty-nine (39) months following the conclusion of this agreement, the lead states will conduct a follow-up examination to determine compliance with the agreement.
In early 2011, the National Association of Insurance Commissioners (NAIC) formed the Investigation of Life/Annuities Claim Settlement Practices Task Force chaired by Commissioner McCarty to guide and coordinate the multistate examination process, and conducted public hearings in Florida and California in May 2011 on this issue. Along with AIG, MetLife, Nationwide, and Prudential have now reached agreements through this process. John Hancock reached an agreement with Florida prior to the creation of the NAIC Task Force.
The states of Florida, California, Illinois, North Dakota, New Hampshire and Pennsylvania are serving as lead states for examinations of the largest insurance companies, although Texas joined the AIG investigation because it is the domiciliary state for some of the AIG companies. During this stage of the Task Force's work, the focus has been on the largest 40 insurance groups, which comprise more than 92.4% of the market for life and annuity products nationwide.
Consumers can access more information about the MetLife, Nationwide, Prudential or John Hancock settlement agreements by accessing the DFS Division of Consumer Services' webpage at: www.myfloridacfo.com/consumers/ or the Office's webpage regarding the Life Claims Settlement issue. To search for or claim unclaimed property, visit www.FLTreasureHunt.org, or call 1-88-VALUABLE or (850) 413-3089.
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