New York insurance probe forces $262 million in payments

Reuters News
Posted: Apr 23, 2012 11:58 AM

(Reuters) - A New York investigation into how life insurance companies used lists of recent deaths has led to an extra $262.2 million in payments to people nationwide, the governor's office said on Monday.

The New York Department of Financial Services has been looking for months at how insurers used the Social Security Administration's "death master" list.

The state says it found insurers were using the list to cut off payments to annuity customers who had died, but were not using the list to actively check whether life insurance customers had died, which would have triggered payments to beneficiaries.

Gov. Andrew Cuomo's office said following pressure from DFS to use the list both ways, insurers have made nearly 33,000 payments to customers, more than 20 percent of which went to people in New York.

The state is developing a formal regulation to require insurers to check the death master list to see if any policyholders have died.

Last December, the state said the probe had already led to some $52 million in payouts.

(Reporting By Ben Berkowitz in Boston; editing by Matthew Lewis)