MetLife Inc. has reached a multi-state settlement with the National Association of Insurance Commissioners (NAIC) related the company's use of the Social Security Death Master File, which MetLife selectively used for proof of death and to end annuity payments, but not to initiate payment of life insurance claims.
The total face value for the 708,000 "industrial" policyholders from California, Illinois, Florida and North Dakota, is approximately $438 million. The policies were valued at between $95 and $1,000 each, and sold on a door-to-door basis from the early 1900s until the early 1960s, MetLife expects to pay out $188 million of that in 2012, with the remainder paid over the next 17 years.
The company also paid a $52 million post-tax charge representing the multi-state examination payment. Further, MetLife will submit to ongoing regulatory oversight for three years, document compliance with the agreement and will implement further steps to reconnect with older customers who had not provided the company with Social Security numbers or dates of birth when their policies were issued. These steps include offering some policyholders an option to receive the value of their life insurance policy sooner than provided for in the policy.
According to a press statement, MetLife paid approximately $12 billion in total life insurance claims in 2011 and its records indicate that more than 99 percent of life insurance claims are submitted by beneficiaries and routinely paid in a timely and accurate manner.
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