(Bloomberg News) Life insurers paid $52.6 million in death benefits after New York's banking and insurance regulator forced the companies to use government data to identify cases where they hadn't paid claims.
Almost 8,000 beneficiaries received the money, according to a statement today from the New York Department of Financial Services. Claims are being processed on an additional 27,889 polices for which matches were found. About 1 million policies need further checking as a result of the department's probe, according to the statement.
Insurers have faced increased scrutiny from regulators in Florida, California and other states over unpaid death benefits. MetLife Inc., the largest U.S. life insurer, took a $117 million charge in the third quarter related to unpaid death benefits, while American International Group Inc. added about $100 million to reserves in the second quarter after changing its process for determining when policyholders die.
"Our findings clearly show that matching life insurance policies against a comprehensive list of recent deaths is essential to ensure that all beneficiaries receive the benefits they are owed," Benjamin Lawsky, superintendent of the Department of Financial Services, said in the statement.
The regulator said it July it was directing the 172 life insurers and fraternal benefit societies licensed in the state to use U.S. Social Security Administration death records or other data to identify deceased policyholders.
The longest wait for a payment was connected to a policyholder who died in 1970, according to the statement. The largest award so far was $673,485. Insurers must provide interest on delayed payments, the department said. Data were released today as part of the regulator's first interim report on the benefits.