Friday, February 3, 2012

"But I'm Not Dead Yet": Congress Raises Concerns About the "Death Master File"

Every day seems to bring more news relating to the multi-state investigation into the unclaimed property practices of life insurers.  Most recently, an enterprising asset recovery firm brought a lawsuit against Prudential and MetLife claiming that those firms' unclaimed property practices have cost the State of Illinois millions of dollars.  Similarly, in the mutli-state examination, unclaimed property regulators have alleged that many insurers reviewed certain Social Security files to determine when to stop paying annuities (which are paid by an insurer until someone dies) but were not using that same information to determine when life insurance proceeds should be paid to the deceased's beneficiaries.

Central to this investigation is the so-called "Death Master File", sometimes called the Social Security Death Index (SSDI), which is a listing of all deaths reported to the U.S. Social Security Administration.  Regulators have pushed to make sure that insurers use this information to decide when life insurance benefits are payable.  New York, for example, sent a letter to all insurers in the Empire State and asked them to check the SSDI records against their outstanding policies.

But is the Death Master File a panacea?  Of course not.  So, now there is more news relating to the life insurance investigation, but today, it calls to mind a famous Monty Python skit.  According to an article at LIfeHealthPro, the Inspector General of the Social Security Administration testified before Congress that there are more than 1,000 instances per month where deaths are reported to the SSA, but the person in question . . . isn't actually dead.  That, as you can imagine, may cause problems such as identity theft or adversely affecting the undead's credit reports

What this underscores is that property owners still play a crucial role in making sure that their property does not go unclaimed.  While reliance on government databases, public filings and other "official" records can be helpful in finding missing owners, or locating new addresses, such records are never infallible.

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