ING U.S. agreed to pay $10.7 million to settle a dispute with insurance regulators in a number of states that questioned whether the company did enough to find and pay beneficiaries after policyholders die.
This is the most recent of similar settlements between life insurers and regulators in states that investigated practices by those insurers. Florida, California, North Dakota, New Hampshire and Pennsylvania were lead states in the investigation. Connecticut is included in the settlement and will receive $406,528 as its part of the $10.7 million.
At issue is the allegation that life insurers were using a federally recognized list of all people who die — the Social Security Administration’s Death Master File — to stop paying annuities to people who have died, but not to search for beneficiaries of life insurance policyholders who had died.
The National Association of Insurance Commissioners created a multi-state task force to examine practices by the 40 largest life insurers, which represent about 92 percent of the market, according to the Florida Office of Insurance Regulation.
ING U.S. spokesman Joseph Loparco 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.”
“In reaching this agreement, ING U.S. expressly denied any wrongdoing or violation of law,” Loparco said. “The resolution reflects $10.7 million in examination, compliance and monitoring costs associated with the multi-state market examination that the ING U.S. insurance companies agreed to pay. It does not include any fines, fees, or penalties.”
It is still unknown how many Connecticut policyholders might be affected.
ING U.S. will use the Death Master File to match funds with people affected, and any remaining funds ING U.S. is unable to properly allocate will be forwarded to the state Treasurer’s Unclaimed Property fund, according to the Connecticut Insurance Department.
As of this week, regulatory agreements with seven life insurers has resulted in claim settlements that totaled more than $173 million paid to beneficiaries and more than $800 million given to states which have taken on the task of finding beneficiaries, according to Florida regulators.
The company has about 1,730 employees in Connecticut, of which about 1,650 work in a Windsor office. Others work at home. The company will be rebranded as Voya Financial and was separated from Dutch-based ING Groep N.V. on May 2 when the U.S. company had its initial public offering.