Two life insurance companies have reached settlements with Minnesota officials who accused the companies of failing to pay up when policyholders died.
MetLife will pay the state a settlement of at least $1.5 million settlement and Transamerica will pay at least $2.5 million, Minnesota Commerce Commissioner Mike Rothman said.
In many cases, he said, the companies stopped paying retirement benefits based on a policyholder's death, but never tracked down the life insurance beneficiaries who were owed a payout.
"What they had indicated was that while they knew it on the annuity side, they hadn't necessarily delved into it on the claims side of their insurance policies to make sure that the beneficiaries of the life insurance policies were getting paid," Rothman said.
The two companies must now check polices going back to 1986, Rothman said. They also have agreed to improve their processes to identify beneficiaries when no one files a claim.
Rothman said Transamerica and MetLife must now check polices going back to 1986.
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"The companies will now have to go through the information they have, make sure the data is good and match that to anybody who has passed away," he said.
Thousands of Minnesotans could have payments coming, he said.
If the companies can't find beneficiaries, the money will go to the state as unclaimed property.
In a statement, Transamerica officials said the company is pleased to have resolved the matter and is committed to paying beneficiaries quickly. MetLife officials said their company pays life insurance claims in a timely manner, and uses a Social Security database to identify any unclaimed policies.
MetLife officials say the company entered into similar settlement agreements with other state regulators in 2012.