Jurisdictions far and wide are hiring auditors to find money thought long since lost and it has insurers fighting mad.
In the past few years life insurance companies in the U.S. have returned $4.4 billion in unclaimed policies to the beneficiaries or to the individual states to hold on to the unclaimed property funds.
That’s great news for the beneficiaries but despite the settlements reached with various states there’s still a great deal of work to be done with an estimated $1 billion outstanding across the U.S.
In North Carolina, the state has introduced legislation – Senate Bill 665 – that would require insurance companies to begin regular death checks of policyholders for policies written after July 1, 2015.
The catch?
“The companies would not have to go through the tens of thousands of policies sold decades ago, which would mean they would only pay benefits on those policies if a beneficiary contacted them, or when the policy holder would have reached 100,” states the Charlotte Observer. “Only companies that used a Social Security death master file to shut down payments from annuity policies to people who had died would be subjected to audits of all of their policies.”
Evidently insurance companies in the U.S. are allowed to hang on to unclaimed insurance policies until the policyholder reaches 100 as long as they haven’t been notified of the policyholder’s death.
In one North Carolina example a 43-year-old woman received $1,800 in an insurance settlement from a small policy her mother had taken out without her knowledge. If the state hadn’t battled the insurance company in this instance the daughter would have had to wait 28 years (mother’s 100th birthday) to get those funds.
That’s good news for the woman in this example but many times beneficiaries aren’t finding this out and as a result, aren’t able to benefit immediately from a policyholder’s best intentions.
While 20 or so insurance companies across the U.S. are working with the states to identify dead policyholders so they can do the right thing and pay out to the beneficiaries, many companies are fighting this tooth and nail because the money at stake is significant.
So, a battle is brewing where the victor is far from certain.
That’s great news for the beneficiaries but despite the settlements reached with various states there’s still a great deal of work to be done with an estimated $1 billion outstanding across the U.S.
In North Carolina, the state has introduced legislation – Senate Bill 665 – that would require insurance companies to begin regular death checks of policyholders for policies written after July 1, 2015.
The catch?
“The companies would not have to go through the tens of thousands of policies sold decades ago, which would mean they would only pay benefits on those policies if a beneficiary contacted them, or when the policy holder would have reached 100,” states the Charlotte Observer. “Only companies that used a Social Security death master file to shut down payments from annuity policies to people who had died would be subjected to audits of all of their policies.”
Evidently insurance companies in the U.S. are allowed to hang on to unclaimed insurance policies until the policyholder reaches 100 as long as they haven’t been notified of the policyholder’s death.
In one North Carolina example a 43-year-old woman received $1,800 in an insurance settlement from a small policy her mother had taken out without her knowledge. If the state hadn’t battled the insurance company in this instance the daughter would have had to wait 28 years (mother’s 100th birthday) to get those funds.
That’s good news for the woman in this example but many times beneficiaries aren’t finding this out and as a result, aren’t able to benefit immediately from a policyholder’s best intentions.
While 20 or so insurance companies across the U.S. are working with the states to identify dead policyholders so they can do the right thing and pay out to the beneficiaries, many companies are fighting this tooth and nail because the money at stake is significant.
So, a battle is brewing where the victor is far from certain.
