In a move to reform business practices in the life insurance industry, another major life insurance company has agreed to settle with insurance regulators in several states. 

ING U.S. has agreed to settle the dispute and has been ordered to pay $10.7 million, an amount that does not include any penalties, fees or fines.

Insurance regulators have alleged that ING used the Social Security Administration’s data base of deceased people known as the “death master file”, to stop making annuity payments to dead customers, but then failed to search for beneficiaries of life insurance policyholders who had died. 

A multi-state task force was created earlier this year by the National Association of Insurance Commissioners to examine practices by the forty largest life insurers in the United States.   According to the Florida Office of Insurance Regulation, these forty insurers represent 92 percent of the life insurance market.

Michael Consedine, Pennsylvania Insurance Commissioner, said, “Like the companies before them, our investigation showed that ING was not using available information to identify policyholders who have died, in order to pay their beneficiaries.”  Consedine also commended ING for cooperating with regulators and for their willingness to correct its practices and “fulfill its promises to its policy holders.”

The lead states in the investigation were Florida, California, North Dakota, New Hampshire and Pennsylvania.  Currently agreements with seven life insurance companies have resulted in claim settlements that total more than $173 million paid to beneficiaries and more than $800 million given to states to assist regulators with the task of  locating beneficiaries.

“ING,” according to spokesman Joseph Loparco,” in reaching this agreement, expressly denied any wrongdoing or violation of law.” ING will from this time forward use the “death master file” to identify and pay death claims on a uniform and timely basis.