The California Department of Insurance and other state insurance regulators have signed a settlement agreement with ING over its improper use of the Social Security Administration's Death Master database.
In order to settle the charges, ING has agreed to reimburse a monetary penalty of nearly $10.7m to insurance regulators, including Florida, California, Connecticut, New Hampshire, Pennsylvania, Illinois and North Dakota.
The agreement was inked by the California insurance commissioner Dave Jones, which guarantees that the policyholders and beneficiaries will remain protected.
Based on the settlement, Dutch financial company ING agreed to incorporate various business practice reforms, such as using the Death Master database to search its records for deceased life insurance policyholders so that its beneficiaries may be paid.
The regulators found that the many insurance companies failed to use the database to recognize their own deceased life insurance policyholders whose beneficiaries are owed life insurance proceeds, thus avoiding billions of dollars payments in life insurance proceeds.
Commissioner Jones said, "This settlement is another step forward in changing life insurance industry practices regarding the use of the Death Master database."
Following the ING settlement, eight life insurers representing nearly 43% of the total national market have confirmed or consented to reform their business practices and use the Death Master to search for deceased policyholders and make benefit payments.