NY life policies pay $52M since July

Insurers have handed out $52.6 million in life insurance payments to nearly 8,000 beneficiaries since July, when New York regulators ordered them to locate and pay overdue death benefits, state officials said Monday.

More than 1,200 payments, worth $16.9 million, went to New Yorkers.

In July, state insurance regulators fired off a letter to 172 insurers operating in New York, requiring them to match years of policy records with Social Security death records to identify any unpaid benefits. Insurers often search death records to cut off annuity payments when a beneficiary dies but have failed to use similar searches to make payments on death benefits, regulators say.

Insurers have faced increased scrutiny from regulators in Florida, California and other states over unpaid death benefits.

Benjamin M. Lawsky, superintendent of the New York Department of Financial Services, said most companies already had the "Death Master File," as Social Security's updated list of confirmed deaths is called, but they used the database only to determine when the companies could stop paying annuities to policy holders.

"This list should also be used to find people owed millions of dollars of life insurance benefits," he said.

Lawsky's office would not say how many payments were made on Long Island or disclose names of insurance companies making the payments.

Metropolitan Life Insurance Company began an annual process of cross-checking policy and death records late last year, a spokesman said. MetLife Inc., its parent company, took a $117 million charge in the third quarter related to unpaid death benefits.

American International Group Inc. added about $100 million to reserves in the second quarter after changing its process for determining when policyholders die. A representative of AIG didn't immediately return a call seeking comment.

Of the 8,000 payouts made since July, in one case a company paid a benefit on a death from 1970. The largest individual payment so far was $673,000.

Thomas Workman, president of the Life Insurance Council of New York, said insurers are cooperating with the state's inquiry but said insurers aren't legally required to locate unpaid benefits.