Filed Under:Your Practice, Regulatory

Thrivent sued on unclaimed property

California Controller John Chiang and Thrivent Financial for Lutherans are going toe-to-toe over access to Thrivent policyholder records related to unclaimed property.

Chiang filed suit in Sacramento Tuesday demanding that Thrivent, based in Minneapolis, turn over records necessary to determine if Thrivent is failing to pay death benefits to the beneficiaries of policyholders known to be deceased.

It followed Thrivent’s decision to file suit Oct. 30 in San Francisco seeking to limit the information that California will receive in order to comply with California’s audit authority.

David Westmark, Thrivent’s senior counsel, said in response to Chiang’s suit that California “is filing suit to receive data that goes far beyond his authority to receive.”

Westmark said that Thrivent believes Chiang is entitled to access an insurer’s records “for data that would reasonably lead to the discovery of unclaimed property for California.”

Yet, Westmark said, Chiang is asking for private information regarding all policyholders in all 50 states for the last 20 years. Westmark said Chiang’s contract auditor, Kelmar Co. of Boston, is seeking not just names of policyholders, but also addresses, Social Security numbers, date of birth data, policy values and not only on the insured but on policy owners and beneficiaries.

“There is no way that information on an insured in Wyoming that has no contact with the state of California would ever lead to the discovery of unclaimed property that California is entitled to receive,” Westmark said. "The real issue is protecting the privacy of Thrivent’s members. The controller can audit to the extent of his authority, but not beyond that.”

Chiang said in a statement that, "Unlike other life insurance firms, which are now cooperating with California to correct past injustices perpetrated against their policyholders, Thrivent has suppressed its records and is flaunting California’s consumer protection laws," Chiang said.

He said that if Thrivent has nothing to hide, “it should open its books and be accountable as the law requires. Thrivent will either comply with the rule of law out of an ethical obligation to its clients or it will do so under court order."

The complaint filed on behalf of Chiang charges that Thrivent refused to allow the Controller to audit its records in order to determine whether the company failed to pay deceased policyholders' beneficiaries or turn the proceeds over to be safeguarded in perpetuity by the State Controller's Unclaimed Property program until returned to the rightful owner or heir.

Also, the complaint asserts that Thrivent impeded the progress of audits for 14 months, before filing its lawsuit.

The suit is the third filed by Chiang against insurers dealing with access to records on insurance policies. The comptroller wants to ensure that either insurers pay a beneficiary on a life insurance claim, or turn the money over to the proper state.

Chiang earlier this year filed suit against American National Insurance Co. of Galveston, Texas, and Kemper Insurance, based in Chicago. Last month, a Sacramento Superior Court judge ruled in favor of the Controller and ordered ANICO to turn over their records to the Controller.

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