More Life Insurers Settle Unclaimed Property Complaints With California
If you have been following the multi-state unclaimed property investigations into life insurers, its time to update your scorecard. When we left the story, about 10 companies had settled claims or lawsuits relating to their death benefit payment practices. Generally, the investigation focused on regulators’ complaints that many insurers review the Social Security Administration’s death records to determine whether an annuity policyholder had died, so they could stop paying annuities (which are paid by the insurer until the policyholder dies), but were not using that same information to notify life insurance beneficiaries that the policyholder had died (and thus, that the beneficiaries were entitled to collect on the policy). For their part, the insurers generally denied any wrongdoing, but some agreed to revise their policies. In the interim, a number of states have passed legislation to require life insurers to do periodic checks of their records.
In more recent news, LifeHealthPro reported that 11 more insurers have reached a settlement with the California State Controller’s Office to resolve claims over their benefit payment practices. Details of the settlement, and the companies involved, appear in Arthur Postal’s article at LifeHealthPro, but even the general numbers are staggering — the Controller’s office estimates that the value of the recent settlements is worth more than $750 million.