Unclaimed Life Insurance Updates
A few items of note concerning the long running regulatory investigation into the unclaimed property practices of life insurers, and their use of the Death Master File to determine whether policies are eligible to be paid. Earlier this week, NBC’s The Today Show posted an article estimating the value of unclaimed insurance policies at over $1 billion. The story provides a good summary of the issues, and the history of the investigations to date.
Of course, wherever there is a giant pot of money reported, people seeking a share of it will not be far behind. According to a report by Arthur Postal on LifeHealthPro, at least one plaintiffs’ lawyer has commenced a class action against insurer John Hancock seeking damages for delayed notification of life insurance benefits. For its part, John Hancock has already been investigated — and reached a settlement — with a variety of states concerning this particular issue. Thus, it appears that the insurers’ fears of having the state investigations being used to fuel private class action lawsuits is coming to pass. It is doubtful that this will be the last such case.