Florida bill requiring greater life insurance investigations signed into law

The legislation requires life insurers to do more to find beneficiaries of policies following the death of the policyholder

Insurance News

By Lyle Adriano

Florida Governor Rick Scott signed into law this week legislation requiring life insurers to do more to find beneficiaries of policies.

Under the terms of the law, insurers must comb through the Social Security Administration's Death Master File for all their policyholders from 1992 and every year moving forward to identify beneficiaries.

If beneficiaries cannot be found, the law stipulates that the insurance company must turn the policy over to Florida’s Unclaimed Property Program, overseen by Florida Chief Financial Officer Jeff Atwater.

The bill, SB966, was sponsored in the Senate by Sen. Lizbeth Benacquisto, R-Fort Myers. Rep. Bill Hager, R-Delray Beach, sponsored a similar bill in the House.

A good number of life insurance companies have been sitting on billions of dollars in overdue and unpaid life insurance benefits, said Atwater, which is why he made the resolution of the issues a top priority. He also noted that a number of insurers did little to track down beneficiaries.

"For years insurance companies had no trouble sending their agents to their house for the weekly payment," Atwater said in a committee meeting regarding the issue early this year. "They knew exactly where they lived for 20 years. But now that it may be time to pay up, it’s a horrified hardship to find that individual."

Atwater added that many life insurance companies had built-in business practices that would purposefully prevent them from knowing if a policyholder had passed away, reducing the payouts they hand out.
 

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