Pain Points and Strategies to Improve the Death Claims Process

Legal changes and degraded data hinder benefits reconciliation

By Jonathan Berry III, James Ouellette, James Moore

The financial strain of the pandemic and its aftermath is prompting states to broaden and hasten unclaimed property examinations and enforcement, tightening exemptions and shortening dormancy periods to mitigate budget shortfalls. While this increased focus on regulatory compliance is not new to insurers, rapid advances in machine intelligence to detect non-compliance are intensifying the need for sophisticated, data-driven methodologies to fulfill unclaimed property obligations. This growing need for precise and prompt data, however, is paradoxically met with more restricted and complicated access to the essential data sources that power these methodologies.

Before November 2011, the Social Security Administration’s Death Master File (DMF) was a comprehensive, accessible, and affordable repository of nationwide deaths available to approved entities, offering insurers an efficient and economical means to monitor the vital status of their policyholders using reliable data from the federal government. However, changes to Section 205(r) of the Social Security Act, effective on November 1, 2011, prohibited the disclosure of state death records except under specific conditions, resulting in the removal of 4.2 million records from the DMF and subsequent annual exclusion of more than 1 million records.


Gain Limited Insight at Higher Cost and Increased Complexity

In the years that followed, the Limited Access Death Master File (LADMF) emerged with a fraction of nationwide deaths, now capturing fewer than 20% of deaths in the United States. Access to this repository is limited to certified organizations that implement rigorous internal controls and obtain independent attestation from an Accredited Conformity Assessment Body. The certification process, which is both time-consuming and expensive, and the lack of a comprehensive alternative to the DMF, greatly complicates processes to collect data and evaluate claims. These added layers of complexity to an already onerous process are challenging for insurers to address on their own.


Death Master File

Navigating these changes means insurers must identify and integrate novel death data sources, assess the accuracy and completeness of these sources, and manage the intricacies of contradictory information across sources. This meticulous process can impede effective outreach to beneficiaries of deceased policyholders and reconciliation of policyholder benefits without guidance from a trusted advisor or death audit service provider.


Make Better-Informed Decisions with Differentiated Data

As the reliability of mortality data from federal repositories declined, state vital statistics and local data collections emerged as promising alternatives, but challenges persist. Most states continue to impose data access and use restrictions, while others lack uniformity in their data release schedules, with updates occurring months or even years apart. Obituaries, funeral home notices, and other public death announcements provide a more localized view, but gathering and harmonizing this unstructured information from myriad sources is an immense task for most insurers.
While each death data source contributes to a broader data mosaic, the true value for insurers lies in integrating death data with commercial consumer information, such as address updates and credit reports. This synthesis of differentiated information equips insurers with more timely insights, enabling them to navigate an evolving regulatory environment and make better informed decisions.

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