New Hampshire part of multi-state $500m MetLife agreement

As part of a multi-state investigation led by New Hampshire and five other states, life insurance giant MetLife will pay nearly $500 million to consumers and the states to settle charges that it failed to pay death benefits to heirs.MetLife said it will pay out about $438 million over the next 17 years, with $188 million going to beneficiaries this year. Insurance regulators from the states had accused the company and others of delaying or withholding life insurance payments to many of its policyholders.The funds will either be sent on to beneficiaries of deceased MetLife policyholders or stored in state coffers as unclaimed property. MetLife will also cover states’ costs of finding beneficiaries and sending them the benefits overdue to them.In additin, MetLife will make a $40 million payment, to be allocated based on premium volume, among the states in the settlement. New Hampshire’s share of the settlement has not yet been determined, according to state Insurance Commissioner Roger Sevigny, but it is expected to be about $300,000.According to Roger Sevigny, MetLife failed to thoroughly use the Death Master File, the Social Security Administration’s database of deceased individuals, to locate beneficiaries.The states’ regulators concluded that when MetLife was aware of policyholders who died, it often didn’t pay beneficiaries. And in many cases when benefits went unclaimed after several years, the company did not forward the funds to the state, as required by law.Several other life insurance companies used similar practices, possibly to boost profits, regulators said. Prudential reached a similar settlement with state regulators earlier this year, and John Hancock settled last year. There are eight more ongoing investigations.In a statement, MetLife denied dragging its feet on paying benefits, but it said it will institute several reforms.”MetLife agrees that periodic matching of administrative records against available external sources such as the Social Security Death Master File is a best practice and the company is implementing a monthly matching process,” it said.MetLife further promised to thoroughly search for beneficiaries while also attempting to reconnect with policyholders over age 90. It also said it launched a website to help customers find their policies. – JEFF FEINGOLD/NEW HAMPSHIRE BUSINESS REVIEW