• A Storm Cloud on the Horizon: Unclaimed Property Auditors Targeting Middle-Tier Insurance Companies
  • October 5, 2012 | Authors: Marlys A. Bergstrom; Robert A. Previti; Phillip E. Stano; Steuart H. Thomsen; Mary Jane Wilson-Bilik
  • Law Firms: Sutherland Asbill & Brennan LLP - Atlanta Office ; Sutherland Asbill & Brennan LLP - Washington Office
  • Over the past three years, more than 25 insurance companies have become subject to market conduct exams and unclaimed property audits by more than 35 cash-hungry states. Represented by Verus Financial, LLP (Verus), state auditors and insurance regulators are asserting that insurers have engaged in improper handling of life insurance policies and annuity contracts by failing to proactively identify death claims and locate missing beneficiaries. Verus claims that insurers consult certain government databases-e.g., the Social Security Administration’s Death Master File (DMF)-to terminate annuity payments when annuitants die, but do not consult these same databases to determine whether life insurance insurers or annuity contract owners have died in order to pay their beneficiaries. Verus further asserts that insurers throughout the industry have failed to timely escheat death benefits and matured policy/contract proceeds.