Jan 11, 2012

Death Master File Changes May Mean Multi-Billion Bonus For Life Insurers

From Fox Business:
For years, the Death Master File of the Social Security Administration (SSA) was a valuable resource for life insurance companies when they needed it, and ignored when they did not. ...
Insurers can use the list to find out if a life insurance policyholder has died, at which point they must pay the beneficiaries. According to Florida, California and New York regulators investigating the insurance industry, many insurers have not consulted the file, leaving it up to beneficiaries to track down the policies and claim their money. ...
In 2011, this came to light when Florida Insurance Commissioner Kevin McCarty asserted that life insurers had held back $1 billion that could have gone to beneficiaries if insurers had only checked the Death Master File to learn whether their policyholders had died. Other insurance regulators quickly followed up. Life insurers already have paid nearly $53 million as a result, according to a statement released by New York State Department of Financial Services Superintendent Benjamin Lawsky. ...
But it looks like there will be a reversal in beneficiaries' good fortune. As of Nov. 1, the SSA no longer discloses what it calls "protected state records" of deaths -- essentially any records it acquires from the states, to insurance companies or the public. The decline in the size of the Death Master File is substantial; 4.2 million of its 89 million records will be excised from the public files and made available only to federal agencies.


And of the 2.8 million deaths reported to the file each year, only 1 million will be available to the public. In other words, most recent deaths won't be reported.

5 comments:

Anonymous said...

I have to have some sympathy for SSA. Earlier newspaper articles had carped about the death master file and the fact that there were numerous mistakes in it. Accusations were made that SSA is was irresponsible for posting it online.

Now the claim is SSA is somehow in bed with insurance carriers because they are responding to earlier criticism that the material should not be public.

Damned if they do...

No Saj said...

Or they could have, you know, fixed the mistakes.

Anonymous said...

The mistakes were a result of outside reports (State death reports and CMS reports). It would be relatively easy to automatically compare reports against the numident records, and kick out the reports that don't match the identifying information. But manually working the reports after the questionable ones are kicked out would be impossible given SSA's current staffing problems. It really shouldn't be SSA's job to correct errors in SSNs reported by the States or CMS. They did the easy thing, they took the questionable reports offline (though I don't know if that includes the CMS reports).

Anonymous said...

I breathlessly wait until when these death record files will be used to purge the deceased from current voter records and prevent voter fraud. Maybe we can also do a cross check from the past election to see how many dead people voted. It will be interesting to compare this with party registration! Perhaps this can begin in Chicago?

Anonymous said...

Couple of points:
The error rate is less .05%. How much money is any organization expected to spend to get to perfection? If it becomes available, likely the mistakes would be further eliminated.

Errors are corrected weekly, meaning once identified, the erroneous data is removed and the file updated within a week.

Users of the DMF are supposed to confirm their proposed actions (deletion from voter role, cutting of credit card or utility)prior to taking the action because we know the data isn't perfect. Many of the reported problems are as a result of people not taking that step but taking the action anyway. That should be on them, not SSA.

The DMF is made available due to the freedom of information act. It is public data; not pick and choose who should see it data. Proposals that try and find distinctions between those who should see it and those who shouldn't are ignorant of what FOIA is about and what public means.

Lastly, even if it is public data under FOIA, many states make money selling this kind of data and many have laws restricting SSA from sharing death data because it cuts into their revenue stream. The current restriction on the DMF stems from reassessing how SSA determined if the data was sharable.

The idea that the dead have privacy rights is debatable. The idea that by sharing this data promotes fraud is crazy because it is precisely by letting financial organizations know who is dead that allows them to prevent this kind of fraud. Thieves will still know who is dead, but now the odds will be greater than the "good guys" won't yet know. Opening up new opportunities for fraud.

And shame on the IRS for having the DMF in their possession yet still letting fraudsters steal those kids identities and then blame SSA for their sloppy processes.