Tag: life insurance

Friday Lost + Found: Show Me State Searches, Sunshine State Slowdown, Audit Webinar

Missouri Legislature Passes Life Insurance Bill . . . . — The Missouri legislature recently passed House Bill 2150, which would require insurance companies to compare policy information against the Social Security Administration’s Death Master File on a semiannual basis.

. . . .While Florida Insurers Seek to Block Bill — In the same vein, WMFE is reporting that a group of insurers has filed suit in Florida state court seeking to prevent retroactive provision of a law that requires them to undertake DMF searches back to 1992.

UPPO Audit Webinar — The Unclaimed Property Professionals Organization (UPPO) is hosting a webinar on compliance efforts and avoiding audits.  Among the topics to be covered are state amnesty programs, completing state unclaimed property questionnaires, and fine-tuning compliance procedures.  Further information and sign-up details can be found at the UPPO website.

Friday Lost + Found: More Fraud Warnings, Insurance Questions . . . is DMF the Answer?

Massachusetts Warns of Fraudulent LettersMassachusetts Treasurer Deborah Goldberg issued a warning that her office has been receiving reports of fraudulent unclaimed property letters seeming to come from the Office of the Commonwealth Treasurer.  As a reminder, states do not charge owners of unclaimed property for searching for and obtaining property from the state.

Life Insurance on Sixty Minutes — CBS’s news program 60 Minutes recently ran a story about life insurers payment practices that is based, in large part, on the mutli-state audits of insurers’ unclaimed property practices.  As a result of those investigations, states have become increasingly more insistent that insurers consult the Social Security “Death Master File” in order to determine when life insurance benefits have become payable.

But Is DMF The Answer? — Though more and more states are requiring DMF searches as part of unclaimed property law or insurance regulatory compliance, some in the industry think that the approach is flawed.  In a recent editorial on InsuranceNewsNet, Michael Babikian voices some of those concerns and offers some alternatives.

West Virginia Insurance Battle Moves From Courts to Legislature

Last summer, the West Virginia Supreme Court of Appeals issued an opinion in Purdue v. Nationwide Life Insurance Company, a case presenting the issue of whether a life insurer is required to undertake periodic investigations to determine whether any of its policyholders are deceased (and, thus, that a death benefit is payable).  While the Court did not rule that insurers had a specific obligation to review the Social Security Death Master File (DMF) or similar databases, it nonetheless held that the dormancy period for a life insurance policy begins at the date of death and placed the burden on insurers to figure out how to ascertain that information.  Of course, an insurer could search the DMF, the Court explained, but they could also “contact its insureds directly” (e.g., call them every year), farm the task out to agents, or do whatever else the found “the most economical” so long as they obtained the required information.

While the West Virginia Supreme Court’s ruling seemed to be the end of the matter, some lawmakers are opening up a new front in the state legislature.  A few weeks ago, two West Virginia lawmakers introduced House Bill 4473, which would amend the state unclaimed property act to provide that: 

in the case of a life or endowment insurance policy or an annuity payable upon proof of death, the obligation to pay does not arise until after a claim is made with the insurer and due proof of death is received by the insurer.

The bill provides that it is being introduce to “clarify an unintended result” of the Supreme Court’s decision in Nationwide.  Not everyone agrees, however, that the obligation to contact holders was “unintended” by the Court.  According to a story in the Charleston Gazette-Mail, one of those who disagrees with this characterization, and the new legislation, is West Virginia State Treasurer John Purdue, the official who began the case against the insurers in 2012 which led to the Supreme Court’s decision.  According to the Gazette-Mail, the Treasurer noted that the Supreme Court’s decision was “bipartisan” and unanimous, and urged the legislature to reject the bill.

The bill is currently pending before the West Virginia House Judiciary Committee.

Lost + Found: Safe Depost Boxes in the Land of Enchantment, Another Insurance Settlement

Video on New Mexico’s Unclaimed Property — ‘Tis the season for unclaimed safe deposit boxes.  Albuquerque’s KOAT (ABC) has a short video about the $132 million in cash and property that New Mexico’s unclaimed property regulators have collected from abandoned safe deposit boxes.  The New Mexico Department of Revenue and Taxation suggests that now is the time to determine if some of that property is yours.

Another Life Insurer Settles Unpaid Benefits ClaimsInsuranceNewsNet has the story of another life insurance death master file settlement.  See here for a primer.  The article states that regulators are “turning away from investigations and settlements, and instead focusing on writing legislation that clearly establishes their authority to conduct the settlement.”  Perhaps 2015 will bring such legislation.