By Arthur D. Postal
A comprehensive examination of ING’s unclaimed property practices conducted on behalf of seven states has uncovered no wrongdoing.
But the Florida Department of Insurance later clarified that the regulatory settlement agreement was entered into prior to the conclusion of any examination. “Similar such agreements have been entered with other life and annuity insurers,” said Amy Bogner, a spokeswoman for the Florida Department of Insurance. “Because the settlement was entered into prior to the conclusion of the examination, no report was issued and no findings were made."
In addition to an agreement with ING, California's insurance commissioner also released a statement clearing MassMutual of any improper use of the Social Security Death Master File (DMF)
database. Both actions were the result of examinations conducted by Verus Financial LLC, a third-party auditor.
The exams are being used by both state insurance regulators and other state treasurers or unclaimed property agencies to determine if insurers are complying with unclaimed property laws.
However, ING has agreed as a result of the examination to comply with new policies states are initiating that require insurance companies to compare all company records regarding the deaths of insureds with the Social Security DMF every month. ING has also agreed to pay $10.7 million in examination, compliance and monitoring costs of the exam.
Jones said that because MassMutual had been found to have complied with the law, no penalties or other costs will have to be paid.
At the same time, Jones said that, “The fact that MassMutual complied with the law in its use of the Death Master database undermines noncomplying insurers' assertions that the legal requirements for use of the Death Master File were not understood by insurers.”
Nancy Kincaid, press aide to Jones, said there was a clear difference between the ING and MassMutual cases. She said, “ING had many of the same issues as other insurers regarding use of the Death Master list. MassMutual
, on the other hand, did not. The MassMutual conduct exam revealed that company has cross-referenced policyholders when using the Death Master database.”
Seven states signed on to the settlement dealing with ING. They are Florida, California, Illinois, North Dakota, New Hampshire and Pennsylvania.
The agreement with ING is effective when 20 states sign on, California and Florida insurance department officials later said. The process of getting the 20 states to sign is “ongoing,” the staff officials said.
“This resolution is a great example of how the best interests of consumers can be met when the industry and regulators work together and find common ground,” ING said in a statement.
ING confirmed that, “In reaching this agreement, ING U.S. expressly denied any wrongdoing or violation of law. The resolution does not include any fines, fees or penalties.”
In announcing the settlement with ING, Florida insurance
commissioner Kevin McCarty said that ING was the seventh insurer with which states leading the examinations have reached agreement with on unclaimed property issues.
McCarty said these seven insurers represent approximately 40 percent of the market for life and annuity products. Nationally, the focus continues to be the examination of the 33 remaining top national life and annuity insurers, McCarty said.
The ING/Mass Mutual settlements constitute the first time that either insurance regulators or state treasurers have given insurers clean bills of health.
Other settlements, including those with Prudential Financial, MetLife, TIAA-CREF, John Hancock, Nationwide Mutual and AIG, have found discrepancies and required payments for alleged non-compliance.
Originally published on LifeHealthPro.com