death masterfile. Sounds like something out of a horror movie. But as an actual reference lift. Every time a death certificate is filed the name is entered in the death masterfile so agencies like Social Security know when to stop playing benefits. But append many private lives have not been using it file properly. Investigations found that company's failed to pay out $5 billion and death benefits by eight ignoring information on the Death Master File . California Commissioner Dave Jones was one of the leaders of that investigation I spoke with him earlier today. Commissioner Jones welcome to the program. Is gay to be with you in the listeners. While This investigation started? When I was appointed as Commissioner in 2011, I learned that life insurance companies were using the Death Master File to their economic benefit to stop making annuity payments to a new orders. Even though they then had knowledge that the policyholders had died, they were not using it to pay life insurance benefits to the beneficiaries of life insurance policyholders. So we began a national investigation and enforcement action of the dance the top for life insurance companies in America. And as of today's date we have reached settlements with 22 of them. Representing 73% of the overall market. And we have required them to take the Death Master File and match it up against their lists of life insurance policyholders and when you find a match search for the beneficiary and pay them. As a result, they had discoursed $5 billion in benefits to over 200,000 consumers. What are some of it companies involved in this? Yes. These are the largest life insurance companies in America. They are the top 40. You can go to the California Department of Insurance website and see who I settlement was not. At this point we have agreements from 22 of them. We are working through the next 18. What is so disappointing is that in when someone buys life insurance, for a loved one or for beneficiary, they expect that it is going to be paid. But often times, maybe your mom, your dad, grandparent by life insurance and will not tell you about it. A step behind a file cabinet. Then the claim is not made. Well in this case the life insurance companies had the information available the to them to know when the life insurance policy holder passed away. But they were not paying the claims and they sat on the money. As a result of our investigation we have been able to get $400 million in benefits paid out in $5 billion nationwide. San Diego has many military personnel, was this be a situation where there could be unclaimed policies? It could apply to anybody that has had a life insurance policy and then they pass away in the family or other beneficiary are unaware of it. We would encourage you to do two things. One, contact the Department of Insurance if you think a loved one had a life insurance policy and we can assist you in trying to track that down. To the other thing that the life insurance companies were doing there are state laws that require in a corporation has your money in several years go by, they are supposed to give your money to the state controller and the state comptroller. They were violating those laws two. The state controllers, led by Betty gave have their own parallel investigation going away. We would encourage you also to contact state comptroller's office in California to see if you are your benefits are there. Mr. Dave Jones, what was the insurance company doing with that money that unpaid out money question mark and also when someone dies, the payments on their policies.so don't the company's inquiry even if they don't cross check with the death masterfile? In some cases people are paying premium overtime in other cases people have fully paid up with her life insurance policy and expected to be paid out. But the what the companies were doing with the money was they were making money on it. They were taking all this money that they had collected on premiums and not paid out benefits and they were investing it in making profits. They were doing that for many years and not making good on the promise of paying the money out. So that is why we have taken such an aggressive approach here. Particularly where companies use the Death Master File for the economic benefit. Where they used to start making annuity payments. You give a pile of money to an insurance company. They promise to make payments to you over the rest of your life. Obviously they want to know when you die so they can stop making payments. The use the Death Master File file to decide to make --.making annuity payments. But once they brought the data into the company, they should have used it to make sure that life insurance policyholder beneficiaries were being paid to and most of them didn't. And that is why are going after them. Is it the life insurance companies responsibility to notify the next of kin that there do a life insurance policy? Our view is if they are using the Death Master File file to their economic benefit to cut up annuity payments, then they had an obligation to take the death masterfile and run it and match it up against their life insurance policyholder names and do so on an annual basis. To see if policyholders passed away and make efforts to pay the beneficiaries. Under the settlement agreements that we have reached with over 20 companies, we require them to do a very thorough search for the beneficiary over many months. We require them to do the search within every available database out there. And then if and only if they can find the people, then they are to pay the money to the controller's office and the controller's office has available as well. We know that the settlement agreements are having a desirable effect getting people the benefits they deserve. Commissioner people are saying to themselves that they think that they may have a policy, what do they do? Two things. One you can call 1-800-927-4357. We have consumer service officers that can assist you with any insurance question that you have and second we also encourage people to contact the state comptroller's office. They have the responsibility for property that corporations have. Where the corporation can't find you for seven years. It's supposed to go the controller's office. In some cases when the insurance company has been a unable to find the beneficiary under the settlement agreement the controller will receive the money and you can contact the controller to see if they have any of your property. That is a good thing to do frankly anyway. People forget about bank accounts. Deposit they have pay for utilities. There are various things being you would be surprised how much money is in the hands of the state comptroller. We earned people to -- we urge people to contact the controller's office. I've been speaking with California insurance commission Dave Jones. Thank you so much.
A national investigation has found that life insurance companies in the U.S. failed to pay out more than $5 billion in death benefits by ignoring a federal death database.
The U.S. Social Security Administration manages an official reference database called the Death Master File. Every time a death certificate is filed, the name is entered into the Death Master File so that government agencies, credit agencies, insurance companies and others can verify death and prevent fraud.
"Our work investigating insurers' failure to use the Social Security Administration's Death Master File and the settlement agreements we have obtained has resulted in over $5 billion in life insurance benefits being paid to over two hundred thousand beneficiaries nationwide," said California Insurance Commissioner Dave Jones in a statement. "More than $400 million has been paid to California beneficiaries alone."
Jones, who helped lead the investigation, discusses the findings on KPBS Midday Edition Tuesday.
