The National Association of Insurance Commissioners welcomed comments from insurance regulators and other interested parties on whether the committee should look further at the need for recommendations or guidelines to promote the consistent handling of unclaimed death benefits by life insurers.
The suggestion comes more than two years after state probes into unclaimed death benefits practices started making headlines and often ended in multi-million dollar settlements. Since 2011, states undertook examinations, public hearings, information subpoenas and audits on this matter seeking to find out whether, and to what extent, insurers were failing to fulfill their payment responsibilities to deceased policyholders. Some state efforts were led by state attorney generals and others by the state insurance departments.
The NAIC became involved when it formed a task force to help coordinate regulatory investigations involving the claim settlement practices of life insurance companies. The states named to that task force included California, Florida (chair), Illinois, Iowa, Louisiana, New Hampshire, New Jersey, North Dakota, and Pennsylvania.
The focus on this issue and the recent trouble it poses for life insurers makes it clear why delay in developing guidelines for life insurers will “increase the chances that states will adopt non-uniform measures,” and in the meantime, the “lack of guidance will create uncertainty for insurers, regulators, and consumers.”