11/15/2017 11:04:11 AM
For Immediate Release
SAINT PAUL – Minnesota Commerce Commissioner Mike Rothman announced today that his department has reached a settlement agreement with a major life insurance company that owed money to Minnesotans for unpaid insurance policies, annuity contracts and retained asset accounts.
The settlement with the American International Group (AIG) represents the latest of 13 agreements that the Commerce Department has secured with life insurance companies over their failure to pay beneficiaries when policyholders died.To date, these life insurance settlements have resulted in total payments of more than $226 million in overdue benefits.
“We are making sure Minnesota consumers get the unpaid life insurance benefits owed to them,” said Rothman, whose agency regulates insurance companies doing business in Minnesota. “When people buy life insurance to help their loved ones, they trust that the insurer will pay the promised benefits. That simply was not happening in thousands of cases. With these settlements, life insurance companies must make good on unpaid benefits from the past and provide timely payments to beneficiaries from now on.”
The latest settlement applies to the following AIG affiliates: American General Life Insurance Company, the Variable Annuity Life Insurance Company and the United States Life Insurance Company in the City of New York.In addition to AIG, settlements have been reached with Allianz, AXA Equitable, John Hancock, Jackson National, Lincoln, MetLife, Minnesota Life, New York Life, Prudential, Riversource, Transamerica and Voya (ING). The Commerce Department also continues to investigate claims and payment practices at several other life insurance companies.
As a result of the agreements and ongoing investigations, at least $226 million in claims owed on Minnesota policies have been paid either directly to beneficiaries or, when they could not be located, to unclaimed property programs in Minnesota and other states, which hold the funds in trust until claimed by the rightful owners or their heirs.
The 13 insurance companies have also made a total of nearly $17.7 million in settlement payments to the State of Minnesota, including $2.4 million from AIG.
The settlements are the result of sweeping “market conduct” examinations by the Commerce Department to identify unpaid life insurance policies and annuities owed to Minnesotans.
These examinations determined that the insurance companies had inadequate information and procedures for identifying policyholders and beneficiaries who may be owed benefit payments. This included failure to regularly match their policy records against the Death Master File, a database of deaths compiled by the Social Security Administration.
As a result of these deficiencies, the insurance companies in many instances failed to pay benefits to beneficiaries after policyholders had died.
Under the terms of the settlements, the insurance companies now must take additional steps to maintain accurate information, use the Death Master File and make timely payments to beneficiaries.
“I encourage Minnesotans to make sure their life insurance companies have up-to-date contact information for themselves as well as their beneficiaries,” said Rothman. “Many people are never told they are named as beneficiaries in life insurance policies, so they often have no idea an insurance payment is owed to them.”
How can I find a lost life insurance policy or annuity contract that belonged to a deceased family member?
The Minnesota Commerce Department website /commerce/consumers/your-insurance/life-annuities/locator-service.jspoffers a free Life Insurance Policy Locator service through the National Association of Insurance Commissioners (NAIC). Individuals who believe they are beneficiaries of a deceased person can submit a search request for life insurance policies and annuities. Participating insurers compare a submitted request with available policyholder information. When there is a match, the insurance company will directly contact the beneficiary.
How can I avoid missing out on money I am owed?
Talk to your loved ones about any insurance policies they may have. Encourage them to keep their policy information in a safe place along with other important financial documents.
How can I avoid a delayed payment or non-payment of insurance proceeds owed on my policies?
If you are a policyholder, contact your insurance company to confirm that it has your most up-to-date contact information. This includes current address, Social Security number and date of birth. Also check with your insurance company to confirm that it has current information on the beneficiaries you have designated in your policies.
What happens when a beneficiary cannot be located and the funds are transferred to the state as unclaimed property?
The Minnesota Commerce Department is responsible for safeguarding these funds and holding them in perpetuity until claimed by the rightful owners or heirs. The department maintains an online database of unclaimed property in Minnesota. Searching this public database is easy and free at www.missingmoney.com.
Director of Communications
Minnesota Department of Commerce
p: 651-539-1463 | c: 651-368-5050 | email@example.com