State Regulators Review Life Insurance Claim Practices
Author: National Association of Insurance Commissioners
Published: 2011/07/10 - Updated: 2026/01/29
Publication Type: Announcement
Category Topic: Life Insurance - Related Publications
Page Content: Synopsis - Introduction - Main - Insights, Updates
Synopsis: This report documents regulatory action taken by state insurance commissioners through the National Association of Insurance Commissioners (NAIC) to investigate claim settlement failures in the life insurance industry. The information proves valuable for policyholders and beneficiaries, particularly seniors and people with disabilities who depend on these financial protections, as it exposes a troubling industry practice where insurers accessed Social Security death records to terminate annuity payments but failed to use that same data to pay life insurance benefits owed to beneficiaries. Understanding these regulatory investigations helps consumers recognize potential issues with their own policies and reinforces the importance of keeping beneficiary information current with insurance carriers - Disabled World (DW).
Introduction
Reviewing the full extent of the practices concerning life insurance and annuity industry.
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).
Main Content
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.
Insights, Analysis, and Developments
Editorial Note: The formation of this multi-state task force marked a turning point in insurance industry accountability, revealing how companies selectively applied death verification data to their financial advantage rather than their contractual obligations. For families already dealing with the loss of a loved one, the additional burden of fighting for rightfully owed benefits adds unnecessary hardship during an already difficult time. This regulatory intervention serves as a reminder that even large, established insurers require oversight, and beneficiaries should proactively verify that their life insurance policies remain active and that contact information stays up to date. The investigation's findings have since influenced industry practices and underscored the need for beneficiaries to maintain regular communication with insurance providers rather than assuming automatic payment upon death - Disabled World (DW).Attribution/Source(s): This quality-reviewed publication was selected for publishing by the editors of Disabled World (DW) due to its relevance to the disability community. Originally authored by National Association of Insurance Commissioners and published on 2011/07/10, this content may have been edited for style, clarity, or brevity.