(Updates with company’s methodology in fifth paragraph.)
Feb. 2 (Bloomberg) -- Prudential Insurance Co. of America agreed to pay $17 million as part of a multistate settlement over death benefits when an insured person dies and no claim is filed.
The settlement was announced today by Florida insurance regulators and the state’s attorney general. Prudential will build a system to match data and search for beneficiaries if they find a match, and to do the matches more often, according to a statement.
Twenty states must sign the agreement by March 31 for it to take effect, according to the statement. Seven states have joined so far: Florida, California, Illinois, Pennsylvania, New Hampshire, New Jersey and North Dakota.
“Life insurance companies should devote the resources necessary to find beneficiaries and make payments in a timely manner, and this settlement is one more advance in changing industry practices to protect rightful beneficiaries,” Florida Attorney General Pam Bondi said in the statement.
Prudential, based in Newark, New Jersey, will phase in enhanced search practices over three years, it said in an e-mailed statement. Since 1998, the company said it has made matches by comparing policyholder records against a Social Security Death Master File. It will expand use of the data by matching records against the master file on a monthly basis, according to the statement.
The company “remains committed to paying the claims of our customers” and standards set by the settlement “will supplement Prudential’s extensive prior efforts to identify deceased insureds and to locate beneficiaries,” according to the statement.
--Editors: Charles Carter, Stephen Farr
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