Insurance Commissioner Mike Causey has issued an advisory to all life insurers writing individual and group coverage in North Carolina of their obligation to pay death benefits as required by law. The advisory was issued at the request of the North Carolina Office of the Chief Medical Examiner who has been receiving consumer inquiries due to the delayed payment of life insurance benefits because death certificates were issued with the cause of death listed as “pending.”
Medical examiners are required to make a medical certification as to the cause of death within three days and must file a death certificate within five days. However, there are times where a medical examiner cannot determine the cause of death within this timeframe. In those cases, a medical examiner may list the cause of death as “pending” on a death certificate.
Insurers are not allowed to withhold payment of a death benefit to any beneficiary longer than reasonably necessary to determine whether benefits are payable. After a life insurance policy has been in force for two years, an insurer’s ability to contest the validity of a policy is limited. In most cases, an insurer only needs to know that an insured has died; the cause of death has no impact on whether benefits are payable. As a result, the payment of benefits should not be delayed because the cause of death on a death certificate is listed as “pending.”
“I appreciate the North Carolina Office of the Chief Medical Examiner bringing this issue to our attention. It is always important that insurance benefits are promptly paid, especially in situations where someone has lost a family member,” said Insurance Commissioner Mike Causey. “I encourage insurers, when possible, to accept a death certificate issued by a medical examiner with a ‘pending’ cause of death as sufficient proof of loss to facilitate prompt and fair claim settlement.”
Consumers who have questions about the prompt payment of benefits under a life insurance policy may speak to a consumer specialist at the N.C. Department of Insurance by calling 855-408-1212.