State Treasurer John Perdue’s Unclaimed Property Division has received $16.4 million in life insurance proceeds since 2012, more than five times the amount the office took in prior to that year.
That is the year Perdue’s office filed a lawsuit against dozens of life insurance companies, alleging the firms were either not paying beneficiaries their due proceeds or failing to report the money as unclaimed property. That litigation is ongoing today.
“I am heartened by these figures,” Treasurer Perdue said. “It shows our prior legal victories are having some bearing on the amount of life insurance monies being surrendered. I encourage anyone to check our unclaimed property list if there is any question as to whether a loved one died with life insurance money due him or her.”
As of June 13, 2017, the Treasury’s Unclaimed Property Division had received $16.4 million in life insurance proceeds due to beneficiaries. The 2017 fiscal year ended June 30.
Contrast that with life insurance reported through 2012, prior to circuit court litigation: $3.8 million. In 2012 alone, life insurance companies reported $1.3 million, or about one-third of all life insurance ever reported. Before 2012, only $2.5 million had been reported, which is more than five times less the current figure.
At that time, life insurance companies were entering into global resolution agreements with some states, comparing their insureds against Social Security’s Death Master File. Checking the file is a near foolproof way to see if an insured has died, which, the Treasurer argued, necessitates a payout.
Treasurer Perdue’s efforts have not been without challenges. In December 2013, a circuit court judge ruled in favor of insurance companies on the grounds a claim must be filed in order to receive life insurance funds.
“How can you file a claim for a policy if you don’t know one exists?” the Treasurer asked. “If a loved one forgot about the policy and never told anyone there is no way to know. It’s the definition of unclaimed property.”
The case migrated to the state Supreme Court in June 2015. The high court ruled that the death of the insured triggers a duty to locate beneficiaries or report proceeds as unclaimed. The Supreme Court remanded the cases back to circuit court for resolution along those lines.
Perdue won another victory in April 2016, when former Gov. Earl Ray Tomblin signed into law HB4739, a bipartisan effort to clarify the obligation companies possess. Use of the Death Master File to determine beneficiary payout or unclaimed property reporting was part of the law.
“These same companies use this file to cut off annuities,” the Treasurer argued. “It would be just as easy to appropriate it for payments.”
Earlier this year, the same court denied a motion to dismiss the lawsuits filed by Treasurer Perdue. This most recent decision allows all pending cases to move forward.
“This strengthens our position and reaffirms the Supreme Court’s ruling,” said Treasurer Perdue. “I just want people to have what is rightfully theirs. Now we can get back to the table and work on resolving these cases for the good of West Virginia consumers.”
Since taking office, Treasurer Perdue has returned approximately $168 million in unclaimed property funds to rightful owners. For more information on West Virginia’s Unclaimed Property program, visit www.wvtreasury.com.
Unclaimed property is any asset from which an individual has become unintentionally separated. Examples include a forgotten utility deposit, a left-behind final paycheck or uncashed stock dividends.