The insurer is currently at risk of being shut down if it doesn’t make its payments.
Officials in New Mexico are currently working to collect over $100,000 from a life insurance company that has previously stated that it will not make payments to two deceased state employees who had been paying for this coverage.
The insurer, which is based in Oregon, has stated that a lack of medical history form prevents the payment.
According to Ed Burckle, the General Services Department Secretary, the reason that the life insurance company will not pay the families of the two men who have died, is because their files do not contain their medical history forms.
The department has already paid the families what would have been provided by the life insurance.
Burckle explained that the department wanted to make sure that the families of the deceased workers received their compensation, so it has paid them the $55,000 each. Now, they are waiting for the life insurance company to repay them so that the state can be refunded for that amount. As of yet, the insurer has given no response.
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As a result of this behavior, Burckle has said that the agency is considering an early termination of its contract with the life insurance company, so that it can find another insurer that will be willing to provide the supplemental coverage in a way that they deem more acceptable. The state feels that if the insurer refuses to cooperate and make certain that the families receive the payment that their deceased loved ones have been paying for, then they will have no choice but to drop them.
New Mexico state officials are also taking the precaution to check all of the files of the other workers to make sure that there are no other paperwork issues that could cause this kind of life insurance struggle in the future. The coverage in question was actually a supplemental program that was meant to ensure that the families of the employees would receive even more money following the untimely death of their loved one, above and beyond the traditional policy.