In a new decision, the Court of Appeals of Ohio ruled that a life insurer is under no duty to search the Social Security Death Master File (“DMF”) to independently determine on an annual basis whether policyholders deceased prior to the insurer receiving proof of death from beneficiaries or claimants. See Andrews v. Nationwide Mutual Insurance Company, No. 97891 (Ohio Ct. App. Oct. 25, 2012).
In reaching its decision, the Ohio appellate court primarily turned to the language of the policies at issue, reasoning that the policies required “receipt” of proof of death (or required that the insurer “receive” proof of death), which conveyed to the court that the insurer was under no affirmative obligation “to procure such information.” The court also reasoned that Ohio law generally places the burden of furnishing proof of death on beneficiaries or claimants, and that it was not a breach of the duty of good faith and fair dealing for the insurer to fail to utilize the DMF for the benefit of its life insureds.
It is noteworthy that the insurer in Andrews did previously use the DMF to selectively terminate annuity payments, which was mentioned by plaintiffs-appellants in their appeal. However, the court refused to look beyond the insurance policy terms, holding, "[i]n the absence of legislative or administrative regulatory action, we will not import additional unspoken duties and obligations onto Nationwide that will conflict with the parties' contracted terms."