NCOIL Forms Panel Seeking Consistency in Unclaimed Property Rules, Laws
January 31, 2014 by Thomas Harman, associate editor, BestWeek: Tom.Harman@ambest.com
WASHINGTON – The National Conference of Insurance Legislators has formed a new unclaimed property task force in an attempt to improve what lawmakers believe are inconsistent rules and state laws regarding unclaimed life insurance benefits.
NCOIL’s new panel will examine and make recommendations to improve the NCOIL’s Model Unclaimed Life Insurance Benefits Act, promote consistency and uniformity in existing standards, and examine how states have applied unclaimed property laws. Recommendations would be made as needed, an NCOIL statement said.
The NCOIL model act was passed in 2011 and nine states have since adopted it. NCOIL President Rep. Greg Wren of Alabama said in spite of those developments, confusion over how to handle unclaimed property has increased in recent years. “That confusion has manifested itself in a patchwork of legal requirements, resulting in regulatory uncertainty and consumer frustrations,” Wren said in a statement. “Even the NCOIL model varies as adopted from state to state. It makes sense for NCOIL to continue to take a leadership role on this issue.”
NCOIL past presidents Rep. Robert Damron of Kentucky and Rep. George Keiser of North Dakota will chair the task force, which will consist of a legislative committee appointed by Wren made up of lawmakers from NCOIL contributing-member states. Also assisting will be a new advisory council whose members will include state insurance regulators, state government organizations, insurance trade associations and consumer groups.
Unclaimed property settlements between states and life insurers have resulted in multimillion dollar settlements in recent years because companies failed to adequately use the Social Security Administration’s Death Master File to find when life insurance policyholders had died and where beneficiaries could be found. Insurers agreed to improve procedures to find beneficiaries. Last fall, New York Life Insurance Co. agreed to pay $15 million to state regulators to settle a dispute over the company’s use of the DMF data base. New York Life said it wanted to settle in part because the dispute was preventing state regulators from the opportunity to craft uniform national standards for companies to follow when conducting searches on unclaimed property using the DMF (Best’s News Service, Oct. 24, 2013).
The task force’s first conference call is expected to occur in mid-February and its first in-person meeting will occur March 7 during NCOIL’s Spring Meeting in Savannah, Ga.
