Legal Alert: Ohio Court Holds No Insurer Duty to Search Death Master File


Life insurance companies in Ohio have no affirmative duty to search the Social Security Death Master File (DMF) or otherwise seek out information on possible deaths, the Ohio Court of Appeals has held in Andrews v. Nationwide Mutual Insurance Company, No. 97891 (Ohio Ct. App. Oct 25, 2012). Affirming the dismissal of a putative class action filed by private plaintiffs, the court held that the life insurance contracts at issue “do not impose a duty on [the insurer] to search the DMF to determine whether their insureds are deceased,” and therefore “obligating [the insurer] to solicit or gather information pertaining to an insured’s death would be contrary to the terms contained in the insurance policy.” Opinion ¶¶ 19 & 28. The court found “no validity to appellants’ allegations that [the insurer] has breached the implied covenant of good faith and fair dealing by failing to utilize the DMF for the benefit of its life insureds.”

The Andrews case is one of four putative class actions brought by private plaintiffs in Ohio seeking to require life insurers to undertake death matches. These putative class actions were brought following significant regulatory activity relating to unclaimed property issues in the life insurance industry. The complaints alleged that the defendant insurers had an affirmative duty to search the DMF at least annually for possible deaths of insureds under life insurance policies and to pay death benefits without requiring any further notice of death.

In the Andrews complaint, the plaintiffs alleged that although they were alive, the “actuarial probability” of their mortality was greater than 70%. They alleged that the insurer’s duty of good faith and fair dealing required it to check the DMF, at least on an annual basis, to see whether any insureds at or above the asserted 70% death probability threshold have died, and to pay insurance proceeds “even in the absence of a submission of proof of death.” Plaintiffs sought an injunction requiring defendants to search for deaths at least annually, a declaratory judgment to the same effect, and a further declaratory judgment that, as to deceased class members, defendants must “pay the proceeds of the insurance contract, without first requiring further notice of death.” They also asserted a breach of the duty of good faith and fair dealing and a claim for unjust enrichment.

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