Jackson National, Axa Settle Death Master File Suit

Jackson National and Axa are the latest life and annuity carriers to settle with state regulators over the use of the Social Security Administration’s Death Master File.

The Jackson National and Axa announcements last month brought the total number of DMF-related settlements in 2015 to 24.

“Jackson National and Axa have stepped up and done the right thing for policyholders," said California Insurance Commissioner Dave Jones in a news release issued Dec. 17. "I urge other life insurers to follow the lead of the 22 other companies that have agreed to use the Death Master File database to search for life insurance policyholders."

The past five years have seen dozens of life insurers settle with state regulators over the use of the DMF.

States accused as many as 40 carriers of not bothering to cross-reference the DMF when it came to life insurance benefit payouts, yet carriers were more than happy to dig through the same data to stop annuity payments to deceased beneficiaries.

Some companies even continued to collect premiums after policyholders died.

The investigations were conducted by regulators from California, Connecticut, Illinois, Michigan, Florida, New York, Iowa, North Dakota, New Hampshire and Pennsylvania.

More than 30 states are involved in the settlements.

Carriers, depending on where they sell policies, settled with more states than other carriers, but the global settlement amount easily runs into the tens of millions of dollars. In addition, the carriers have paid out more than $1 billion directly to tens of thousands of beneficiaries.

Here is a compilation of which life insurers have settled so far.

2015 Announcements

Dec. 17: Axa, Jackson National reach a combined $5.78 million DMF settlement, with Axa paying $3.28 million and Jackson National paying $2.5 million, California regulators announced.

March 23: Guardian Life agrees to pay $2 million to states participating in the national investigation of life insurers and Pacific Life agrees to pay $2.45 million, California regulators said.

January: Allianz Life Insurance Co. of North America and Allianz Life Ins. Co. of New York reach a $4.7 million settlement with the states, according to California Insurance Commissioner Dave Jones and Illinois Department of Insurance Director Andrew Boron.

2014 Announcements

Nov. 25: Symetra Life Insurance Co. and Symetra National Life Insurance Co. agree to pay $1.2 million to the states to settle, California and Illinois regulators announced.

Nov. 13: Sun Life Insurance Co. settles for $3.2 million, the Illinois Department of Insurance announced.

May 27: Transamerica agrees to pay $2.5 million and MetLife agrees to pay $1.5 million to settle, the Minnesota Department of Commerce Commissioner Mike Rothman said.

Jan. 21: Genworth Life Ins. Co. reaches a $1.9 million settlement with nine states: Illinois, California, Delaware, Florida, Iowa, New Hampshire, North Dakota, Pennsylvania and Virginia, California regulators announced.

2013 Announcements

Dec. 20: Delaware reaches settlements with three carriers totaling more than $320,000: Midland National Life Insurance Co. for $25,785.62; Aviva Life & Annuity Co. and Aviva Life & Annuity Co. of New York for $12,724.67, and New York Life Ins. Co., the New York Life Insurance and Annuity Corp., and New York Insurance Corp. of Arizona for $281,821, according to the Delaware Insurance commissioner.

Dec. 10: Lincoln National Life Insurance Co., Lincoln Life and Annuity Company of New York and First Penn Pacific Life Insurance Co., all members of Lincoln National Corp., reach a $12.6 million settlement over the use of the DMF, according to California and Illinois regulators.

Nov. 25: Midland National Life Insurance Co. agrees to pay states $3.3 million to settle, Illinois insurance regulators announced.

Nov. 21: Aviva Life & Annuity Co. and Aviva Life & Annuity Co. of New York agree to pay $4 million to several states, according to the Illinois Dept. of Insurance.

Oct. 24: New York Life Insurance Co. reaches a $15 million settlement, California and Illinois regulators announced.

Sept. 9: Transamerica Insurance agrees to pay $11.2 million to states that are party to the settlement, the Illinois Insurance Commissioner reported.

Aug. 19: ING Life Ins. and Annuity Co. settles with regulators for $10.7 million, the California regulator said, following the investigation led by investigators from Florida, California, Connecticut, New Hampshire, Pennsylvania, Illinois and North Dakota.

June 24: TIAA-CREF agrees to pay $6.2 million to six states as part of the company’s DMF settlement, according to the Florida Office of Insurance Regulation.

June 7: California State Controller John Chiang announces settlements with 11 life insurance companies. Companies not already listed here include Hartford, Northwestern Mutual and Western & Southern.

2012 Announcements

Nov. 16: California regulators announced that John Hancock Life Insurance Co. and John Hancock Life and Health Insurance Co. agree to pay $13.3 million to settle the suits from regulators in California, Illinois, New Hampshire, North Dakota, Pennsylvania and Michigan.

Oct. 22: American International Group Inc. agrees to pay $11 million to the states participating in the settlement, according to California Controller John Chiang and Insurance Commissioner Dave Jones. The insurance giant also agrees to pay as much as $30 million owned to beneficiaries.

Oct. 11: Nationwide Financial agrees to settle to the tune of $7.2 million, California regulators announced.

April 23: MetLife agrees to pay $40 million to state regulators as part of the DMF settlement, California regulators announced. Earlier in the year, regulators indicated that the company will also pay out “upwards of $500 million” to the beneficiaries.

Feb. 2: Prudential Insurance Co. settles with seven states for $17 million, according to California regulators.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].