US state insurance regulators have imposed a monetary penalty of $12.6m on the Lincoln National Life Insurance Company, and various life and annuity affiliates over the use of the social security administration's Death Master File (DMF) database.
Other companies in the settlement include Lincoln National Life Insurance Company, Lincoln Life and Annuity Company of New York and First Penn Pacific Life Insurance Company.
The latest agreement was signed by the state insurance departments in North Dakota, California, Florida, Illinois, Indiana, New Hampshire and Pennsylvania, with Pennsylvania being the lead state in this examination.
According to the insurance regulators, the settlement ensures protection for policyholders and beneficiaries.
Commenting on the settlement, California insurance commissioner Dave Jones said, "This agreement is another success in our nationwide effort to reform life insurance industry practices regarding the use of the Death Master database."
Under the terms of the settlement, Lincoln National agreed has also agreed to promptly identify when a policyholder has died and will use the DMF on a uniform and timely basis to search for deceased policyholders and make payments to their beneficiaries.
Pennsylvania insurance commissioner Michael Consedine said, "With this settlement, life insurance companies representing over 55 percent of the total national market either conform or have agreed to reform their business practices."
The insurance regulators have ordered insurance companies to properly use DMF to find out the beneficiaries of the deceased policyholders and make benefit payments.
Photo courtesy of Nyttend.