By David Phelps, Star Tribune (Minneapolis)
Tribune Content Agency
Dec. 12–The Minnesota Commerce Department announced agreements with two life insurance companies Thursday to increase efforts to find and pay death benefits to beneficiaries of their policyholders. The settlements with Voya (ING) and Lincoln bring to five the number of insurers in the state who have agreed to implement new procedures to pay proceeds on unclaimed life insurance policies. As part of the latest agreement, Lincoln and Voya also will pay the state $2.5 million and $1.5 million, respectively.
The five settlements are the result of a broad “market conduct examination” by the Commerce Department to find unpaid policies for Minnesotans. “Consumers expect that when they purchase life insurance policies, that the company will pay their loved ones the benefits upon their passing,” Commerce Commissioner Mike Rothman said. The state previously announced settlements with Prudential, MetLife and Transamerica. Examinations into the practices of six other insurers are still pending.
Rothman said the department in its examination found “troubling practices” among insurers and their efforts to identify beneficiaries and disperse proceeds after the deaths of policyholders.
The settlements require insurers to maintain current data on policyholders and to stay in touch with them and their beneficiaries.
In the case of Voya and Lincoln, those insurers must review the records of policyholders back to 1990. The department estimates that 127,000
Minnesotans currently have policies with those two insurers.
The department said the new procedures help companies find a policyholder who has died and take affirmative steps to pay out benefits instead of waiting for family members or other beneficiaries to step forward and approach the insurers.
The settlements with Prudential, MetLife and Transamerica have resulted in the payment of about $30 million to beneficiaries, said Libby Caulum, the Commerce Department’s consumer outreach director. If insurers are unable to find a policy’s beneficiary, those proceeds are to be turned over to the state’s unclaimed property fund, which is administered by the Commerce Department.
The $610 million pool of unclaimed money, which has grown in recent years, is available for public examination at http://mn.gov/commerce/topics/Unclaimed-Property/.
David Phelps — 612-673-7269