In just a few short months, what began as a probe by California and Florida into the claims-paying procedures of life insurance companies has turned into a nationwide effort to shake loose any and all unclaimed death benefits that have accumulated over the last several decades. An alliance between cash-strapped state governments and enterprising accounting firms, which both get to keep discovered unclaimed assets, is quickly turning to an endless assault on industry practice that could leave insurers reeling.
Looking beyond insurance
Although National Underwriter was unable to determine specific instances where examinations of other financial firms are being conducted to determine their policies into turning over unclaimed accounts to states, the Securities and Exchange Commission issued a notice in August saying it is putting the process used to record efforts to locate missing security holders up for a routine paperwork review.
Indeed, the New York Insurance Department recently issued a bulletin ordering life insurers to use the Social Security Death Master File to locate insureds who may have died and report on the effectiveness of the search.
And, in its August regulatory filing, AIG said it had also started using the Social Security death master file in its claims process system.