Commerce’s intensive market conduct examination unearthed tens of millions in unpaid life insurance policies
May 27, 2014
SAINT PAUL, MN – Today, Minnesota Department of Commerce Commissioner Mike Rothman signed Regulatory Settlement Agreements with Transamerica and MetLife that require both insurance companies to pay Minnesota beneficiaries their rightful proceeds from life insurance policies, annuity contracts and retained asset accounts; and $4 million total in settlement payments to the state – $1.5 million settlement payment from MetLife and a $2.5 million settlement payment from Transamerica. In addition to identifying Minnesotans who have not received payment from insurance products held by the companies, the Commerce Department requires the companies to strengthen their procedures to make sure policy-holders and beneficiaries receive the proceeds from these policies and contracts in a timely manner going forward.
“The proceeds from the life insurance policies and annuities purchased by Minnesotans are expected to go to their loved ones upon their passing to provide financial security and peace of mind, not remain in the accounts of insurance companies,” said Commerce Commissioner Mike Rothman. “The thorough examination conducted by the Commerce Department not only rectifies the past practices of the companies, but puts in place important consumer protections to ensure Minnesotans are protected from these practices in the future.”
The Settlement Agreements with MetLife and Transamerica are the result of a series of targeted examinations conducted by the Commerce Department, which are focused on the handling of life insurance policies, annuities, and retained asset accounts by insurance companies selling products to Minnesotans. Last year, Prudential Insurance Company entered into a settlement agreement, which has already returned over $20 million to the rightful beneficiaries and the Department anticipates similar results for Minnesota consumers with the MetLife and Transamerica settlements.
The goal of the Commerce Department was to identify ways for the companies to clean up the data and streamline the process to identify policyholders and their beneficiaries. The Department determined that there were many policies where policyholders had died but no claims had been made, revealing Met Life’s and Transamerica’s inability to identify and contact policyholders or their beneficiaries upon the determination of a death. This practice prevented timely payment of policies to their rightful owners.
These settlements put in place business practices so that insurers make every effort to maintain good information to stay in touch and pay policy beneficiaries and contract owners. The settlement requires MetLife and Transamerica to review their records and information for Minnesota-related policies for the entire look-back period to 1986, and implement procedures going forward to ensure that the data includes accurate information. Accurate data will enable companies to now utilize what are called “death master” list searches to identify deceased policyholders and ultimately connect the beneficiaries with their money.
The agreement contains other consumer-friendly changes, including: enhanced procedures to find beneficiaries when policyholders have died and compliance with Minnesota’s claim handling and unclaimed property laws if MetLife and Transamerica are unable to identify or locate policyholders or beneficiaries in a timely manner. MetLife’s and Transamerica’s Minnesota customers will additionally benefit from the Commerce Department’s settlement by seeing changes in the implementation of business reforms to correctly and quickly identify policies that need to be paid out. The goal of the Department is to successfully reunite real people in Minnesota with their rightfully owed money. To do this, the Department instructed the companies to employ a look-back period regarding policies active anytime between 1986-2012 and the unclaimed property related to a death, matured policy or contract, or inactive retained asset account.
The Department expects that these settlements will result in many millions of dollars that may be owed and will be returned in the form of policy proceeds that will be paid either directly to the beneficiaries or to the state as unclaimed property if the beneficiaries cannot be located. These new policies and procedures allow the companies to identify a decedent and take affirmative steps to pay out benefits, rather than relying solely on family members or beneficiaries of policies to contact the company. Many individuals who buy life insurance do not notify their beneficiaries that that life insurance policies or annuities exist.
What should I do if I believe I have policy with MetLife or Transamerica?
If you think you are a beneficiary of a policy held by one of these companies, or a loved one has died and you think they were insured with a policy by these companies contact the companies directly. Toll-free numbers have been established to offer assistance in claiming a policy and potential proceeds.