Mortality Searches: The Death Master File and Beyond

Death is a factor in triggering escheatment in many situations. For example, death is a trigger for Roth IRAs in most states. States are also increasingly adding provisions in their unclaimed property laws that utilize death as a dormancy trigger.

For certain property types in some states, dormancy periods will accelerate for deceased owners. Furthermore, in states that have adopted a version of the 2016 Uniform Unclaimed Property Act, holders of IRAs, custodial accounts, and securities must confirm death within 90 days of receiving notice or indication of death.

Many states have also adopted a version of the Unclaimed Life Insurance Benefits Act, a model act proposed by the National Conference of Insurance Legislators, which requires life insurance companies to perform periodic searches of life insurance policies, annuity contracts, and retained asset accounts. If the insurance company finds a match, it must document a good faith effort to use a second source within a specific amount of time – usually 90 days – to verify the death, determine whether benefits are due, and, if so, make and document a good faith effort to locate the owner or beneficiary and provide them with claim submission instructions.

The Death Master File (DMF) is the most common tool used to verify life status. The DMF is a national database containing information about individuals whose deaths have been reported to the U.S. Social Security Administration. DMF records include each deceased individual’s name, Social Security number, birth date, death date, and last known address.

In 2011, the Social Security Administration (SSA) implemented an important change in the Death Master File (DMF) data. Because the DMF includes sensitive, personal data, public access is limited. Certain versions of the DMF are accessible only by subscription from the National Technical Information Service (NTIS), a cost-recovery government agency that disseminates the Limited Access DMF (LADMF) on behalf of the SSA.

The SSA provides a “public” or “limited access” version of the DMF to the Department of Commerce’s National Technical Information Service (NTIS), which sells the data to public and private entities – including government, financial, investigative, and credit reporting agencies, and medical customers. Customers use the data to verify deaths and to prevent fraud, among other uses. The “public” DMF contains more than 88 million records.

The SSA also distributes a “public plus state” (Full DMF) version of the DMF under agreements with nine benefit-paying Federal agencies, including the Centers for Medicare & Medicaid Services and the Internal Revenue Service. The “public plus state” DMF contains over 100 million records.

While the historical Public DMF contained 89 million records, the SSA removed approximately 4.2 million records from this file and has added about 1 million fewer records annually.

In industries such as life insurance, which rely on maintaining accurate death records, internal departments that process claims conduct regular mortality searches against the LADMF to determine the proper payee. While many other industries are not required to conduct mortality searches, unclaimed property auditors often take the position that holders under audit should review their records against the DMF. If an account owner is found to be deceased, and no contact with a beneficiary has occurred, the account is considered lost, which triggers escheatment. The full version of the DMF maintained by the states is not available to all, resulting in a majority of deaths being missed through a DMF-only process.

Property holders with comprehensive unclaimed property compliance programs use many tools to monitor and maintain contact with property owners. Having current, accurate owner records and the ability to contact owners are essential. While DMF comparisons are required by many states for life insurers, additional sources are available to assist all industries in determining or verifying life status.  Challenges arise not only with the DMF match or the DMF data, but a larger issue exists when comparing any death record, particularly alternative available death records for an individual record. To find the missing deceased individual that is not included in the DMF alternate sources must be used that do not include a social security number or other critical personally identifiable information.

MarketSphere’s Enhanced Mortality Search utilizes proactive mortality searches which provides holders with critical information about the life status of owners and beneficiaries. The Enhanced Mortality Search can reduce the reportable unclaimed property population, help insurers and other industries comply with the unclaimed property and insurance laws, and drive the process to reunite rightful owners and heirs with their property.

MarketSphere’s Enhanced Mortality Search bridges the gap by finding deaths missing from the DMF and leverages a dynamic multi-stage approach to:

• Perform a comprehensive search of all client records to determine if a death has occurred.
• Utilize additional search sources to account for the gap of missing deaths in the DMF, including obituaries, state/county records, and genealogical sites. The use of alternative sources not only finds more deaths but also finds them faster.
• Return matches with the highest confidence. Additional sources available to assist life insurance companies in determining or verifying life status include cross-checking death information against obituaries and cemetery records or researching court records, probate files, or genealogy sites.

Ensure the holder has the correct decedent. Possible “fuzzy” matches are vetted by the experienced MarketSphere team, eliminating the need for internal resources to review and confirm results. MarketSphere also engages with its a global network to search for the information necessary to locate the most up-to-date information.

• Identify new or updated owner information for living owner accounts, including new or confirmation of same address, phone, and email.
• Determine the legal claimant or estate representative for deceased owner accounts using genealogy records, wills and estate searches, and court documents.

Statutory requirements and reporting obligations are subject to change and frequently do. A consistent death search process across your entire organization is critical. MarketSphere can assist clients implement processes, policies and procedures around the DMF search requirements, owner and beneficiary outreach and reunification, and marry these with your current unclaimed property program.

To learn more about MarketSphere’s Enhanced Mortality Search and other unclaimed property compliance services, contact us today.

*Content contained in this article is considered accurate as of the publish date.