Life Insurance Payment Practices to be Reviewed

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In an attempt to provide assistance in coordinating the regulatory investigations that are related to the claim settlement practices of the life insurance companies, the state regulators have established a special task force by working through the National Association of Insurance Commissioners (NAIC).

The insurance regulators are focusing on some cases involving several large life insurance companies where the insurers failed to make payments to the beneficiaries for the death benefits under the life insurance policies.

Some of the alleged practices that have been taken into account includes, the insurers using the Death Master File of the Social Security Administration for terminating payments under the annuity contracts but at the same time not being able to utilize those information for facilitating the payments of the claims associated with life insurance policies.

The NAIC President and Iowa Insurance Commissioner Susan E. Voss in her statement talked about the commitment of the state regulators who are reviewing the full extent of the practices concerning life insurance and annuity industry.

She also added that the authority is willing to coordinate multi-state examinations in an attempt to use the state resources effectively to obtain a resolution for these matters. It is to be mentioned that the recently formed task force includes California, Florida (chair), Illinois, Iowa, Louisiana, New Hampshire, New Jersey, North Dakota, Pennsylvania and West Virginia.

To review the industry claims settlement practices, the NAIC task force is currently coordinating with the Florida Office of Insurance regulation and the California Department of Insurance.

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