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New York life insurance companies directed to find and pay beneficiaries
New York is cracking down on life insurance companies, requiring that they try harder to find and pay beneficiaries when policyholders die. When someone dies after they buy life insurance, his or her beneficiaries are responsible for claiming the benefits. But often they don't even know they are entitled to life policy benefits, or don't know which company holds the policy.
The Social Security Administration keeps an up-to-date database of the deceased called Death Master, which includes names, birth dates, Social Security numbers and last known addresses.
According to the National Association of Insurance Commissioners (NAIC), life insurers typically don't check the database to look for clients who died because they are not eager to pay life beneficiaries who fail to come forward. New York hopes to make new insurance rule. In July, the New York Insurance Department said it was concerned about cases where deaths occurred but no claims were filed. Hearings have been held on the issue in the state capitals of Florida and California. Insurance commissioners in those states also are looking for ways to require life insurance companies to make stronger efforts to find beneficiaries.
Source: Insure.com