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New York to protect consumers from unfair denials of life insurance claims

Staff Writer |
Governor Andrew M. Cuomo announced that the Department of Financial Services is taking action to remind life insurance companies of their legal obligations when settling beneficiary claims.

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The guidance issued by DFS today informs life insurers that they must make prompt payments to beneficiaries within the two-year period after a policyholder dies.

"Insurers are on notice of their obligations and that this administration has zero tolerance for those who seek to sidestep their responsibilities," Governor Cuomo said.

“With this action, we are holding insurance companies accountable, helping to ensure beneficiaries receive what they are entitled to, and are working to create a more fair and more just New York for all.”

Through examinations and targeted investigations, DFS has identified disturbing practices among some insurers, in connection with small face value life insurance policies marketed to low- and middle-income consumers for funeral, burial and other final expenses.

The guidance issued today follows a recent DFS enforcement action taken against an insurance company that improperly denied coverage and unilaterally rescinded life insurance policies for hundreds of deceased insured policyholders, leaving beneficiaries without payments due them.

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