Seven states have announced that they have reached a settlement with Prudential Insurance Company of America as well as a number of its affiliate companies.
According to Michael Consedine, the insurance commissioner from Pennsylvania, there were concerns raised over the practices at Prudential over the death benefit payments for beneficiaries of life insurance policies following an exam performed by several states. However, he went on to say that they appreciate the willingness of Prudential to “to reach a settlement that includes changing its business practices to better locate beneficiaries. This will provide consumers with even greater protections.”
The new agreement will have the insurer consistently using the Death Master File from the Social Security Administration in order to be able to make payments to beneficiaries by locating them. It will also require a payment of $17 million by Prudential to the states taking part in the settlement.
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Consedine explained that one of the most frequent questions that the Insurance Department receives is regarding the ways in which to determine whether or not a deceased loved one had purchased life insurance coverage. He stated that as there is no single searchable databank that can provide this information, then insurers must be able to take as many steps as they can in order to locate beneficiaries.
As a result of the settlement, Prudential is now leading the way in the implementation of timely procedures as a part of systems to help to find beneficiaries of policyholders who have died. It is hoped by the seven states taking part in this settlement that this will pave the way for other life insurers to follow with similar efforts.
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