Tax & Accounting Blog

States Heighten Investigation of Unclaimed Property

Compliance, Unclaimed Property November 9, 2011

According to an article in LifeHealthPro, in June 2011, California found insurance companies using the death master file only to terminate annuity policies with living benefits features, and not in finding beneficiaries of holders of life insurance policies that had died. A few weeks later, New York began investigating these policies too.

Since then, Eric Schneiderman, New York Attorney General, and Thomas DiNapoli, State Comptroller, have promised to perform the largest and most comprehensive investigation of life insurance practices in the country. The decision derives from data gathered by both offices in New York that shows funds may have been improperly withheld. Consequently, the Department of Financial Services has asked a total of 172 insurance companies and organizations in New York to disclose their policies, with the possible requirement to report monthly through March 2012.

Also joining the unclaimed property investigation is Minnesota. Lori Swanson, Minnesota Attorney General, recently demanded that 12 local insurers provide a review of their business’ internal records and policies related to death benefits. Disclosures and comprehensive reviews continue to put insurance companies on the spot across the country to assure compliance with unclaimed property laws.