Keane's Unclaimed Property Blog

Death Master File Searches Continue to be a Hot Button Topic

Maryland recently became the third state to propose legislation similar to the NCOIL Model Unclaimed Life Insurance Benefits Act, requiring insurance companies to conduct Death Master File (DMF) searches to proactively identify deceased policy owners. Meanwhile, a US Representative has introduced a bill to Congress that would prevent the Social Security Administration (SSA) from making the information in the DMF public. As a result, the House of Representatives conducted a panel hearing this week to discuss the validity and proper use of the DMF. The DMF and its use continue to be a point of discussion, and various opinions are sure to be heard in the coming weeks.

“While the Death Master File is certainly a valuable source of information, it should not be treated as gospel. The SSA itself has noted that there is incorrect information contained within the DMF,” said Keane’s Chief Compliance Officer, Debbie Zumoff. “Just because you get a positive hit when searching an owner’s SSN in the Death Master File does not mean you should move forward with a definitive action on the account or policy. Another step of research or due diligence is always recommended to truly verify that the person is deceased.”

Following the lead of Kentucky and Tennessee, Maryland’s SB 77 would require issuers of life insurance policies or annuity contracts to perform good-faith cross-checks of the insurer’s in-force life insurance policies, annuity contracts, and retained asset accounts against the most recent DMF on at least a quarterly basis to identify death benefit payments. The insurer must then conduct a good faith effort to confirm the death using additional resources and records. Failure to do so can result in a $2,500 fine for each violation in addition to paying restitution of up to the amount of the actual damages.

As the Maryland legislature moves forward with SB 77, a hearing was recently held in Washington to discuss the DMF as well as H.B. 3475, also known as the “Keeping IDs Safe Act of 2011.” This bill aims to prevent the information contained within the DMF from being made public. The impetus for both the hearing and the Bill is concern over the DMF’s accuracy, as well as the increasing number of reports suggesting that the DMF is often used by criminals to perpetrate identity fraud. The hearing was just conducted on Thursday, February 2nd. Check back often, as we will have news and information as it becomes available.

Click here to view a current listing of States Proposing NCOIL Unclaimed Life Insurance Benefits Act

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