The California Department of Insurance and regulators from six other states announced Thursday that they signed a settlement with Prudential Insurance Co. of America that requires the insurer to use enhanced research techniques to find beneficiaries of life insurance policies.
The agreement, said California Insurance Commissioner Dave Jones, should “ensure that when life insurance policyholders die, their beneficiaries receive the benefits owed.”
Prudential is the first of more than half a dozen targeted insurance companies to settle with California and the other states, which include Florida, Illinois, New Hampshire, North Dakota, Pennsylvania and New Jersey.
“Our company remains committed to paying the claims of our customers...” said Bob DeFillippo, a Prudential spokesman. “Prudential is pleased to work with our regulators to develop and implement the best practices for our industry.”
Prudential has not been accused of any wrongdoing, DeFillippo said.
Part of the agreement calls for Prudential to expand the matching criteria it uses to check a Social Security master list of deceased people. One such technique involves running computer programs to look for transposed letters and numbers that might have allowed deaths to be overlooked in the past.
The settlement also calls for the company to pay the seven states $17 million. The money will be used by the states to monitor compliance.
California currently is in similar negotiations with other insurers. Jones said he hoped that the settlement with Prudential, the country’s second-largest life insurer, would spur the other companies to do the same.
California’s effort to encourage life insurers to more diligently look for missing beneficiaries grew out of a three-year audit by California State Controller John Chiang of life insurance companies. Last May, Chiang and Jones held an investigative hearing into alleged delayed payments of benefits by MetLife Inc.