Insurers settling a death claim with a class beneficiary designation must do all of the following EXCEPT:

• A. Seek a declaratory judgment.
• B. Determine all potential members of the class.
• C. Verify the deaths of class members who predeceased the insured.
• D. Delay settlement until all appropriate beneficiaries can be determined.

Answer: (A)

When a death claim is paid under a class beneficiary designation, the insurer first identifies who is included in the class and how the policy allocates the proceeds among them. That requires determining all potential members of the class, so the insurer knows who may be entitled.

If any class member dies before the insured, the insurer must verify that death to apply the appropriate share to the surviving relatives or the member’s issue, as dictated by the policy language.

In addition, the insurer may delay settlement until the proper beneficiaries can be determined to ensure correct distribution and avoid mispayment.

What isn’t required as a routine step is seeking a declaratory judgment. A declaratory judgment would be pursued only if there’s a dispute or ambiguity about who qualifies or how the policy should be interpreted; it is not a standard part of settling a routine class-designation claim.