An investigation into New York insurance companies resulted in $262 million in payments.
State Governor Andrew Cuomo has announced that several New York insurance companies selling life insurance products will be required to pay out $262 in unpaid benefits following a probe into the practices of firms across the state.
What the investigation determined was that these life insurers were required to make $262.2 million in payments for 32,715 beneficiaries who were unaware that their deceased loved ones had policies for which a claim could be made.
The New York insurance payouts alone were 7,525 in number, worth approximately $95.9 million.
The individual insurance companies involved in the investigation were not named by Cuomo. What he did explain was that those firms had each received notification of the deaths by the Social Security Administration, but withheld the payouts unless the beneficiaries actually made contact to request the funds.
The probe was performed by the state Department of Financial Services and resulted in demands that the companies go over the unclaimed funds and contact the beneficiaries whenever this was possible. The initial order was made in July 2011, forcing the cross-checking of approximately 90 million record, making payouts when applicable.
Equally, the probe determined that the insurers were using the Social Security Administration death notices to cease the annuity checks for the same individuals whose beneficiaries were not being sent the payouts.
On Monday, Cuomo announced that a New York insurance regulation will be implemented that will require that these cross-checks be routinely performed in the future. In a release, he stated that “This investigation makes it perfectly clear that something must be done to make sure families across New York receive the life insurance benefits that they are due.”
Cuomo also stated that insurers will now be mandated to actively search for recent deaths and make payments to policyholders.
The investigation has also resulted in the launch of a website that gives families the ability to perform their own searches for unpaid benefits on the New York insurance policies for their loved ones, following a death. It is located at NYPolicyFinder.com.