Unclaimed Property News Roundup: More Insurance Settlements, Wisconsin Unclaimed Property Sales, NJ (Re)Reintoduces Gift Card Legislation
Prudential Settles Life Insurance Inquiry — There is another update with regard to the multistate examination into life insurance benefit payment practices. When we last left the story in November, Vermont announced a $500,000 settlement with one insurer. Now, according to the Wall Street Journal, California and Massachusetts have entered into a settlement with Prudential to resolve that firm’s payment of unclaimed life insurance benefits. As we’ve described earlier, the controversy revolves around the insurers’ use (or, more to the point, alleged non-use) of the macabre sounding “Social Security Death Index” to determine whether or not life insurance benefits have become payable. Though state laws generally do not explicitly require the use of the SSN index, some regulators have complained that insurers use the SSN Index to stop paying annuities (i.e., products that pay out until death), but don’t use that same information with regard to the payment of life insurance benefits (i.e., those products that pay out upon death). The article in the Journal did not contain a settlement amount, but did indicate that the states “anticipate that tens of millions of dollars will be dispatched to families of deceased policyholders, paid either directly from Prudential or through efforts of states’ unclaimed-property department.” The article can be found here. A similar article from Investment News indicates that Prudential has settled with all 20 states involved in the examination. A press release from Massachusetts on the settlement can be found here.
Wisconsin Announces Increase in Unclaimed Property Sales — According to a press release issued by the Wisconsin State Treasurer’s office, that state’s sale of unclaimed property generated more than $220,000 in revenue for the state, almost doubling last year’s collection. The Treasury credits the rising price of gold with much of the increase. According to the Wisconsin Unclaimed Property Act (Section 177.17), the Treasurer is permitted to sell non-monetary abandoned property to the highest bidder.
New Jersey (Re)Reintroduces Gift Card Legislation — A new legislative year has begun in New Jersey, which means that the State Assembly is again considering legislation to reverse the 2010 changes made to the state unclaimed property law (relating to travelers’ checks, money orders, and stored value cards) , just like was few weeks ago, and just as it did earlier in the year.