02/15/2018
Life insurance policy returns up sharply this fiscal year

 

Surge reflects Treasurer Perdue’s court, legislative battles

 

During the first seven months of this fiscal year, State Treasurer John Perdue’s office has processed more life insurance policy claims than it did in all of fiscal 2017, and has paid out nearly as much in total dollar amount.

From July 1, 2017, the beginning of fiscal 2018, through Jan. 31, Perdue’s Unclaimed Property Division had paid claims on 259 life insurance policies worth $770,365. Having already eclipsed the number of policies paid, the Division should also easily surpass the $832,195 in dollar amount it paid to beneficiaries in fiscal 2017.

“The increase in life insurance benefit returns has been a team effort,” said Carolyn Atkinson, Deputy Treasurer for Unclaimed Property. “We have access to a database that enables us to obtain updated addresses. We send letters to beneficiaries using those addresses. As a follow-up, our field representatives make contact with these folks to assist them with filing claims. It’s been a combined effort that has resulted in more money being returned.”  

In the past twelve months, Perdue’s office has returned $1.2 million in life insurance benefits, nearly a third of the $3.8 million total it has returned altogether.

The uptick in numbers may be attributed to Treasurer Perdue’s long fought battle on consumers’ behalf.

Perdue initially filed a lawsuit in 2012, asking that insurance companies either pay out proceeds upon death or, if the beneficiary could not be found, turn the assets over to the state’s unclaimed property program. Through the help of field representatives, an office website search function and a twice-a-year newspaper insert, the office has traditionally returned various forms of unclaimed property.

In the lawsuit, Perdue asked specifically that companies use Social Security’s Death Master File or a similar database to determine whether an insured was deceased, necessitating a payout.

“These same companies use this file to cut off annuities,” the Treasurer argued. “It would be just as easy to appropriate it for benefit payments.”   

Treasurer Perdue’s efforts have not been without challenges. In December 2013, a circuit court judge ruled in favor of the insurance industry on the grounds a claim must be filed in order to receive life insurance funds.

“How can you file a claim for a policy if you don’t know one exists?” the Treasurer asked. “If a loved one forgot about the policy and never told anyone there is no way to know. It’s the definition of unclaimed property.” 

The case migrated to the state Supreme Court in June 2015. The high court ruled that the death of the insured triggers a duty to locate and pay beneficiaries or, if they cannot be found, report proceeds as unclaimed. The Supreme Court remanded the cases back to circuit court for resolution along those lines.

Perdue won another victory in April 2016, when former Gov. Earl Ray Tomblin signed into law HB4739, a bipartisan effort specifically requiring companies to search the Death Master File or an equivalent file, to determine whether insureds have died.

“I’m proud of these new numbers and what they represent,” Perdue said. “We’ve fought long and hard to return these assets to beneficiaries, who deserve what the policyholder intended them to have. We look forward to more reporting of assets, in order to keep boosting these numbers. It’s the people’s money.”

Unclaimed property is any asset from which an individual has become unintentionally separated. Examples in addition to life insurance policy proceeds include a forgotten final paycheck, a left-behind utility deposit or stock accounts with no long-term activity.

For more information on the State Treasurer’s Office’s Unclaimed Property Division or to conduct an unclaimed property search, go to wvtreasury.com.

Go Back  





West Virginia State Treasurer's Office
1900 Kanawha Boulevard
Capitol Complex Building #1, Room E-145
Charleston, West Virginia 25305
304-558-5000 Toll Free: 800-422-7498

Copyright 2018 by West Virginia State Treasurer's Office