Insurance Commissioner Announces Death Master settlement with Aegon

Insurance Commissioner Announces Death Master settlement with Aegon

Insurance Commissioner Dave Jones announced today that the California Department of Insurance has, with other state insurance regulators, reached a settlement agreement with Aegon over the insurer's use of the Social Security Administration's Death Master File database to ensure policyholders and beneficiaries are protected. Aegon is the parent of Transamerica Insurance Company.

Aegon has agreed to a number of business practice reforms, including using the Death Master File database to search its records for deceased life insurance policyholders so that its beneficiaries may be paid. In addition, Aegon agreed to pay $11.2 million to insurance regulators. The principal lead state in this investigation was Illinois with support from insurance regulators from Florida, California, Connecticut, New Hampshire, Pennsylvania, and North Dakota. Iowa and Vermont contributed to the investigation as states where Aegon is domiciled.

"This agreement advances our nationwide effort to reform life insurance industry practices regarding the use of the Death Master database," said Commissioner Jones. "I commend Aegon for reforming its use of the database to benefit policyholders."

For many years, life insurers have used the Death Master database to search for and stop payments to annuity holders, but did not use the database to identify their own deceased life insurance policyholders whose beneficiaries are owed life insurance proceeds. It is estimated that through this practice, insurers avoided paying billions of dollars in life insurance proceeds to beneficiaries and also failed to turn over unclaimed proceeds to state controllers throughout the United States.

Aegon is the 10th largest life insurance company in the nation with over $21 billion in annual premiums. With the Aegon agreement, 10 life insurers representing over 45 percent of the total national market have conformed or agreed to reform their business practices and use the Death Master to search for deceased policyholders and make benefit payments.

A number of other large life insurers, including life insurance giant New York Life, continue to be the subject of investigation by state insurance regulators.

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