Unclaimed Death Benefits
Unclaimed Life Insurance Death Benefit Lawsuit
Unclaimed Life Insurance Death Benefits | Lawsuit Lawyer | Unclaimed Death Benefits, Failure To Inform Insured Has Passed, Insurance Companies Fail To Follow Regulations
Have you been denied a death benefit because of a life insurance company’s failure to inform you that an insured had passed away? Many states require insurers to turn over the proceeds of unclaimed death benefits to unclaimed property funds if they know that an insured has passed away, but are unable to locate a beneficiary. However, recent investigations have indicated that some insurance companies have failed to follow these regulations, even when they are well aware that an insured has died.
Our firm is offering free legal consultations to anyone denied a death benefit because of an insurer's questionable practices. To find out how we can help you, please contact one of our unclaimed life insurance death benefit lawyers today.
New York Unclaimed Death Benefit Investigation
In the summer of 2011, New York Attorney General Eric Schneiderman expanded a probe into the way life insurance companies identify deceased insureds and pay death benefits. In July 2011, The Wall Street Journal reported that Scheiderman's office had issued subpoenas to nine life insurance companies: AXA SA, Genworth Financial Inc., Guardian Life Insurance Co. of America, Manulife Financial Corp., Massachusetts Mutual Life Insurance Co., MetLife Inc., New York Life Insurance Co., Prudential Financial Inc., and TIAA-CREF.
The New York investigation is trying to determine if these life insurance companies are doing enough to identify deceased insureds and make payments to beneficiaries. The New York Attorney General is also trying to determine if the companies properly turned over unclaimed life insurance proceeds to the state's unclaimed property fund. Insurance companies can use a database prepared by the Social Security Administration called “Death Master,” which lists all Americans who die to make such determinations. While is known that insurance companies use the database for other parts of their business, they often ignore its existence when it comes to making sure unclaimed death benefits are paid to the rightful beneficiaries.
The New York subpoenas were issued under the Martin Act, a state law that doesn’t require prosecutors to prove intent to defraud. Originally passed in 1921, the Martin Act gives New York Attorney General exceptionally broad enforcement authority to bring both civil and criminal actions. The Martin Act also grants the Attorney General extremely broad investigative authority, including the ability to subpoena any document from anyone doing business in New York. New York regulators contend failure to comply with a Martin Act investigative subpoena can constitute prima facie proof of fraud.
California Unclaimed Death Benefit Investigation
In the spring of 2011, the California Insurance Commissioner also embarked on an investigation of life insurance death benefit payouts. Like the New York investigation, the California probe focused on whether unclaimed death benefits were paid in a timely manner, either to named beneficiaries or to the state after a company had learned that an insured person has died. As part of the probe, the California Insurance Commissioner issued subpoenas to MetLife, Prudential Insurance Co. of America, Nationwide Life Insurance Co., The Hartford Financial Services Group Inc., Sun Life Financial Inc., New York Life Insurance Co., The Lincoln National Life Insurance Co., Pacific Life Insurance Co., John Hancock Life Insurance Co. and Aegon Group. At the time the subpoenas were issued, California had already settled a similar complaint against John Hancock valued at $20 million.
Florida Unclaimed Death Benefit Investigation
In May 2011, the state of Florida convened a hearing to determine whether or not life insurers were properly handling unclaimed death benefits. During the hearing, the Florida Insurance Commissioner said the state's audits and examinations of the 40 largest insurance groups may go on for another 18 to 24 months. The commissioner also asserted that the investigation could recoup "north of $1 billion" for both beneficiaries and state unclaimed property funds. In connection with the probe, Florida announced on May 18 that John Hancock had reached a settlement with the state, and had agreed to pay $2.4 million for "investigative costs and attorneys fees," and establish a $10 million fund to pay back beneficiaries of life insurance policies. The $10 million fund is slated to l be used to return monies to beneficiaries as they are located, including interest payments owed since the date of death.
State Task Force Unclaimed Death Benefit Probe
In May 2011, a task force was established through the National Association of Insurance Commissioners (NAIC) by regulators in 10-states to investigate whether a number of large life insurance companies failed to pay death benefits to beneficiaries. The alleged practices targeted by the investigation include use of the Death Master File by insurers for purposes of terminating payments under annuity contracts, but failure to use this same information to facilitate the payment of claims on life insurance policies. State members of the task force include California, Florida, Illinois, Iowa, Louisiana, New Hampshire, New Jersey, North Dakota, Pennsylvania and West Virginia.
Unclaimed Death Benefit Investigations
Several states are investigating various insurance companies over the handling of unclaimed death benefits. In some of these instances, it has been revealed that insurance companies often learn of the deaths of insured individuals via various databases, including one operated by the Social Security Administration called “Death Master,” which lists all Americans who die. In some cases, despite knowing of their death, life insurer companies continued taking premium payments from the policyholder's account until the cash reserves were used up, and then canceled the life insurance contract. At the same time, these insurers use the information gleaned from the "Death Master” and other databases to justify cutting off annuity payments for customers who had died.
Insurers claim their actions are lawful, and they assert that they are only legally obligated to pay death benefits if a beneficiary or other party makes proper notification of a death. According to a report published by The Wall Street Journal in April 2011, some states don't see it that way, however. In at least two - Florida and California - "regulators are questioning if the legal dynamics change if insurers learn of a customer's death while monitoring databases to determine when to cut off retirement-income checks such as annuity payments." Regulators in those states have issued subpoenas to insurance companies to testify at hearings into their practices.
According to the same Journal report, Manulife Financial Corp.'s John Hancock unit became the first insurer to disclose a settlement with officials over the issue of unclaimed death benefits, saying it had agreed with 23 states to set up a system to determine which policies should be handed over to those states. The insurer, however, still maintains it had not violated any laws.
Legal Help for Life Insurance Beneficiaries
If you believe that such practices on the part of an insurer caused you to be denied a death benefit, you may have valuable legal rights. To find out how our unclaimed life insurance death benefit lawyers can help you, please fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529) today.