Florida Announces a $4 Million Multi-State, Multi-Agency Life Claim Settlement Agreement with Aviva
Nov 21, 2013
Florida Insurance Commissioner Kevin McCarty announced today, November 21, 2013, that a $4 million life claim settlement agreement has been reached with two companies, Aviva Life & Annuity Company and Aviva Life & Annuity Company of New York, collectively referred to as “Aviva.”
To view the settlement agreement, click here.
The settlement agreement with Aviva and other similar insurers focuses primarily on the asymmetrical use of the Social Security Administration’s Death Master File (“DMF”) to cease making annuity payments, but not to search for beneficiaries of a life insurance policy who may be due benefits. Aviva has agreed to implement business reforms correcting this practice and to make a multi-million dollar payment, which will be disbursed among the participating states. Florida’s allocation of the $4 million payment is expected to be over $342,000.
The multi-state examination was conducted by Florida, California, Illinois (the managing lead state), Iowa, New Hampshire, North Dakota, and Pennsylvania. Along with these states, the agreement includes the Florida Department of Financial Services, Office of the Attorney General, and the Office of Insurance Regulation.
“This is the tenth Florida agreement to resolve life claim settlement practices, with more than 50 percent of the overall life and annuity insurance market represented nationally. These agreements demonstrate the effectiveness of the multi-state examination process which is overseen by the Life/Annuities Claim Settlement Practices Task Force of the National Association of Insurance Commissioners,” said Florida Insurance Commissioner, Kevin McCarty.
“This settlement is another great win for Floridians who have been subjected to deceitful business practices and deserve to be compensated,” said Florida Chief Financial Officer Jeff Atwater. “Aviva and other businesses who have failed to pay the rightful benefits to Floridians must be held accountable.”
“Life insurance companies must do their due diligence to locate beneficiaries and pay them. In this settlement, Aviva agreed to take the appropriate steps to determine when life insurance funds are due to beneficiaries and timely locate and pay them,” stated Florida Attorney General Pam Bondi.
The settlement agreement requires implementation of the following business practices and reform measures:
- Compare all company records against the DMF Update File every month and against the complete DMF file at least annually from the Agreement effective date.
- Provide quarterly reports to the lead states about the implementation and execution of the requirements of the Agreement for 36 months following its conclusion.
- A follow-up examination to determine compliance 39 months following the conclusion of this Agreement.
Should you have any questions or comments, please contact Colodny Fass& Webb.
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