In response to numerous state investigations this year, the National Conference of Insurance Legislators has approved the Model Unclaimed Life Insurance Benefits Act. Click here for the NCOIL’s press release.
In a nutshell, the Act would require life insurers to periodically check the Social Security Death Master File for deceased policyholders and annuity owners. If adopted by the states, insurers would have to review the DMF against in-force policies at least once a quarter. If there’s a hit–which is the one lottery you don’t want to win–insurers have 90 days to use good faith efforts to locate beneficiaries and tell them how to file a claim. If not found, the benefits escheat to the state as unclaimed property. Not following the Act’s provisions could result in a violation of the state’s unfair trade practices laws.
We’ll continue to follow developments in this area.