Prudential Financial has become the latest US
life insurer to agree to pay beneficiaries of unclaimed life
policies. Under the agreement brokered by the California Department
of Insurance, Prudential will pay a total of some $17m to
beneficiaries in 20 states.
Prudential also agreed to regularly check the
US Social Security Administration (SSA) Department’s Death Master
File (DMF) to determine whether any of its life insurance
policyholders, owners of annuities and holders of retained asset
accounts have died.
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In theory, at least the DMF should be a
one-stop solution to unpaid death benefits. In reality it is not,
indicates testimony given before a Congressional subcommittee of
enquiry into the DMF by SSA inspector general, Patrick P
O’Carroll.
The DMF, said O’Carroll, contains about 85m
records, and it adds about 1.3m records each year. “SSA receives
death information from many sources, including family members,
funeral homes, and some, but not all, states,” O’Carroll explained.
“SSA does not have a death record for all deceased individuals,
thus SSA does not guarantee the file’s veracity.
A person’s absence from the file does not
guarantee the person is alive.”
Adding to the DMF’s shortcomings, being on the
DMF is not always a guarantee that a person is dead. O’Carroll said
that there are about 1,000 cases each month in which a living
individual is mistakenly included in the DMF.
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By GlobalData“We found that about 98% of erroneous death
entries on the DMF were death reports from non-State sources.”
