Til Death Do Us Part
Week of March 18, 2012
Blog Post by Kathleen Moyer, Managing Partner – Compliance Services
I had the opportunity to share the speaker’s podium with Susan McDonald of Pension Benefit Information at the annual Unclaimed Property Professionals Organization (UPPO) conference held in Orlando during the week of March 11. Our session “’Til Death Do Us Part” focused on the Social Security Administration Death Master File (DMF). How the information on the DMF is used, who has access to it, and what records are included (and excluded) were discussed in detail. This topic is of great importance to insurance companies, in light of the various multi-million dollars of unclaimed property enforcement activities conducted by the States.
Two topics that generated considerable interest were the recent removal of 4.2 million records from the DMF and the four bills pending in U.S. Congress. As of November 1, 2011, the DMF will no longer contain state death records. This change resulted in the immediate removal of 4.2 million records from the file and an estimated 1 million less records being reported each year prospectively. This change will impact any company using the DMF to determine whether the owner of unclaimed property is deceased. Basically if the owner was collecting certain benefits from the Social Security Administration (e.g. SSI or SSA) at the time of death, they will be listed on the DMF. However, if the person was not collecting benefits, they will not be listed on the DMF. This definitely will have an impact on how the insurance industry will use the DMF when confirming the death of an insured.
Although the intention of the four bills pending in Congress (HB 3475, SB 1534, HB 3482, and HB 3215) is the prevention of identity theft and tax fraud, they may have the unintended effect of increasing the risk of fraud. Companies, especially in the insurance industry, that are not able to use Social Security numbers to determine whether a person has died could be making millions of dollars in benefit over-payments. Identity theft and tax fraud are very real concerns and should be addressed. However, regulating access to the information, establishing controls, and punishing misuse could be ways to mitigate the risk. Currently, anyone with a credit card can have access to DMF records. There needs to be a balance between total access to the information and controlled access.
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