Nationwide Financial Services, Inc., Columbus, Ohio (Nationwide) has entered into a multi-million dollar settlement with the insurance departments of California, Florida, Illinois, New Hampshire, North Dakota, Pennsylvania and Ohio for its misuse of the Social Security Death Master File database (DMF).
The DMF is the primary tool by which the life insurance industry determines when annuitants and policyholders have died, serving to notify insurers when lifetime payments can be halted and to notify beneficiaries when death benefits can be paid out.
Nationwide agreed to business reforms that hope to ensure that it expeditiously pays out life insurance, annuity and retained asset account benefits. The company will also pay $7.2 million which will be divided among the state insurance departments.
The settlement, announced by California Insurance Commissioner Dave Jones this afternoon, pertains to both Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company.
The settlement was developed alongside an agreement with California State Controller John Chiang and stems from the somewhat prevalent practice across the industry of using the DMF only when it suits the company. Legally, insurers should be checking the DMF every three months.
