Advocates: Life insurers potentially missing millions of deaths annually

Consumer advocates are urging life insurance regulators to strengthen death-claim searches, warning that relying on the federal Death Master File may be missing millions of deaths each year.

Richard M. Weber, a 59-year veteran of the life insurance industry, told regulators Monday that only about 16% of U.S. deaths are now captured in the Social Security Administration’s limited-access Death Master File, the primary federal database insurers are required to check under many state unclaimed life insurance laws.

“Millions of families risk delayed or lost benefits,” Weber said during a special meeting Monday of the National Association of Insurance Commissioners’ Life Insurance and Annuities Committee.

The discussion focused on whether regulators should modernize standards governing how insurers identify deceased policyholders and locate beneficiaries.

The DMF once captured as much as 95% of deaths, Weber explained. That changed after the Social Security Administration removed more than 4 million death records from the public database in 2011 amid privacy and identity theft concerns. Subsequent restrictions enacted under the Bipartisan Budget Act of 2013 further limited access to death records, Weber said.

As a result, he argued, insurers may not learn of many deaths unless family members file claims or use the NAIC’s Life Insurance Policy Locator tool.

A helpful tool

The NAIC’s locator service, launched in 2016, allows consumers to submit information about deceased relatives, which participating insurers compare against their own policy records. If a match is found, insurers contact beneficiaries.

However, the locator tool does not maintain a central database of life insurance policies, does not independently identify deaths and depends on beneficiaries knowing the service exists.

“When the beneficiary doesn’t know the recently deceased family member had purchased and paid for a life insurance policy, or was covered under group benefits, the beneficiary doesn’t know the LIPL exists or how to access it,” Weber said.

Weber was joined by Kathy Belfi, former director of financial regulation at the Connecticut Insurance Department.

They urged regulators to consider developing a new NAIC model regulation that would require insurers to search additional sources of death information, including state vital records, obituary databases, funeral home records and other commercially available death-data services.

Among the recommendations were requiring monthly death searches instead of semiannual or quarterly reviews, shortening beneficiary-search timelines from 90 days to 60 days, and establishing annual reporting metrics on death matches and successful beneficiary contacts.

Inconsistent state adoption of unclaimed-life-insurance requirements has created uneven consumer protections, the consumer reps said. About half the states have adopted versions of the National Council of Insurance Legislators’ model unclaimed life insurance law, while others have adopted different requirements or none at all.

“One of the best reasons our state-based system works so well is because states try to be as consistent as possible with our regulation and our policyholder protection,” Belfi said.

‘We want to pay’

Industry representatives pushed back on suggestions that insurers are failing to locate beneficiaries. Leah Walters is senior vice president, state relations for the American Council of Life Insurers.

Life insurance companies share the goal of paying benefits, she said, adding that 38 states have adopted either the NCOIL model or their own Death Master File search requirements.

“We share your goal,” she told Weber. “We want to pay money to the beneficiaries that we make a long-term promise, and we intend to keep those promises.”

Walters pointed to the success of the NAIC Life Insurance Policy Locator tool, noting that the NAIC reported last year that the service had helped uncover more than $13 billion in benefits since its launch.

Life insurers paid $223 billion in benefits in 2023 and $198 billion in 2024, Walters said.

Regulators on the call acknowledged both the success of the locator program and concerns about consistency among states.

The call ended without a commitment for future action, but Iowa Insurance Commissioner Doug Ommen, chairman of the committee, suggested the potential for “discussion time” at a future national meeting.

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