Returned $1.2 million in fiscal 2019 to life insurance beneficiaries
State Treasurer John Perdue’s Unclaimed Property Division has returned $1.2 million to life insurance claimants in fiscal 2019.
The figure represents a continuation of the Treasurer’s fight to return proceeds to beneficiaries, which began seven years ago when the Treasurer filed suit in a state circuit court. Eventually, the state Supreme Court sided with the Treasurer and lawmakers mandated the methods by which insurance companies should remit unclaimed life insurance policies.
In fiscal 2019, which ends June 30, insurance companies have reported $2.7 million in unclaimed life insurance benefits. The benefits are unclaimed because in many cases the deceased did not tell anyone a policy existed – meaning the beneficiary did not file a claim.
“That’s always been the crux of our case,” the Treasurer said. “How can someone file a claim for policy benefits when he doesn’t know of a policy? It’s a classic definition of unclaimed property.”
Unclaimed property is any financial asset from which an individual has become unintentionally separated. Examples include a forgotten utility deposit; a final paycheck not cashed; or stock dividends left uncashed for a long period of time. Real estate plays no part.
Before legal action, the Treasurer’s Office received very little in the way of unclaimed reported life insurance assets.
“We’re proud that our fight to reunite people with their life insurance benefits has been fruitful,” the Treasurer said. “As with all forms of unclaimed property, I repeat the same mantra – it’s your money and we want you to have it.”
In 2012, when Treasurer Perdue first filed suit, 20 claims resulted in an approximate $24,000 returned; that total continued to swell from $78,000 in 2013 and to $1.1 million and $1.2 million in FY 2018 and FY 2019, respectively.
Approximately $5.2 million in life insurance benefit claims have been returned in state history. Of that amount, $4.3 million – or 82 percent – has been returned since Treasurer Perdue took legal action.
Life insurance companies originally argued that a beneficiary must file a claim with the company for life insurance proceeds, a qualification made impossible to meet, the Treasurer argued, if he or she doesn’t know the policy exists.
The Treasurer eventually appealed to the state Supreme Court, which remanded the case back to the same circuit court, ruling life insurance companies have an obligation to determine whether insureds have died and thus whether beneficiaries are due proceeds. In April 2016, former Gov. Earl Ray Tomblin signed into law HB4739, a bipartisan effort to clarify the obligations companies possess.
Integral to that outcome was a legislative requirement to use Social Security’s Death Master File, a definitive record of the deceased. Some companies had used the same file to cut off annuity payments upon discovering the death of the investor.
To conduct a free search for unclaimed property in West Virginia, visit www.wvtreasury.com.