How to identify decedents efficiently and effectively
without a single and comprehensive data source.

Insurance companies deal with a variety of challenges when managing their policyholders (life, long term care, PRT, structured settlements, annuitants), with inaccurate or missing participant data being the most impactful. Incorrect information affects how insurance companies communicate with policyholders, accurate forecasting of risk, the number of overpayments made, access to information when a Department of Labor (DOL) or state audit takes place, and overall management of the policy.

For years, the Social Security Administration (SSA) has published the Death Master File (DMF), which was considered a comprehensive source of information. Over the past several years that has changed, creating a significant gap in the data – making it hard to identify decedents in a timely manner.

More than $1 billion in overpayments now occur annually by organizations who unknowingly send payments to deceased participants.

Missed deaths are leading to overpayments for insurance companies in their Pension Risk Transfer (PRT) and Structured Settlements lines of business. In Long Term Care (LTC), missed decedents are causing companies unnecessary and significant reserves, fraud, and several other issues.

How did this happen?

The SSA first made the DMF available in 1980. Originally, the file was updated quarterly and contained the name, date of birth, date of death, zip code, and social security number of decedents across the nation.

Starting in 2011, the SSA has dramatically decreased the amount of data available via the DMF. This decrease in records is due to a passed law that prohibited death records reported by the states via the Electronic Death Registration (EDR) system to be released in the DMF. Over the years, more states began using the EDR system which further reduced the SSA reported records. Today, the SSA DMF only has information on about 16% of the total death occurrences. In addition to reporting fewer deaths, the details provided on individual decedents has also declined – removing zip code information for the decedent and beneficiaries.

The chart above shows the decline in DMF death records in comparison of the Centers for Disease Control and Prevention (CDC) reported deaths.

What options do insurance companies have?

The decline in the data available via the SSA DMF has introduced two issues that make identifying deceased policyholders much more difficult: data source proliferation and data complexity. Insurance companies are now forced to look for additional data sources including state records, local records, and obituaries.

Without the single comprehensive data source that was once available, accurate decedent identification is nearly impossible for individual organizations without access to significant human resources and/or data. While some have tried to compensate with more internal resources, it’s inevitable that these efforts reach limits in accuracy and efficiency and create headaches down the road without strong documentation for audit preparedness.

Administrators are very limited when it comes to solving for inaccurate and proliferated data. There are only two options: 1) implement an internal process, or 2) work with a service provider.

Implementing an internal process

Implementing an internal process reduces the number of individuals/organizations that have access to policyholder’s confidential information. However, this requires substantial time and resources. Additional staff will need to continuously monitor and research the status of each individual participant. This will likely involve also purchasing access to databases to aid in the search. This comes with a significant increase in human error, resulting in false positives and missed deaths.

An internal process also relies heavily on self-reporting by a policyholder’s beneficiaries. The beneficiaries may or may not know about the participant’s plan. PBI has found that even when working with companies with a relatively robust internal process, a significant portion of deaths are still missed – resulting in costly overpayments.

Accurate and timely discovery of policyholder deaths on the annuity side of life insurance can save millions in overpayments and can also help fulfill the company’s fiduciary and compliance obligations to quickly find policyholder beneficiaries.

Working with a service provider

PBI Research Services’ CertiDeath death audit is the only solution on the market that has helped bridge this gap. Using integrated databases of over 26,000 data sources, and human expertise, CertiDeath provides validated results, identifying 96.5% of deaths to minimize overpayments, reduce fraud, save time, and meet fiduciary responsibilities.

In addition, PBI’s CertiDeath has one false positive for every 3,000 deaths identified vs. one false positive for every 211 deaths identified via DMF – an improvement of 96%.

Whether you have a robust internal process or work with another service provider, when we run your data for the first time, we will identify a missed death – it happens 100% of the time. Try to prove us wrong by having us run a free CertiDeath analysis for your participant population.

Contact us today for your free CertiDeath analysis.