A bill in the Florida legislature increasing the requirements of life insurance companies following a policyholder’s death moved forward Monday.
Senate Bill 966 requires insurers to search the Social Security Administration’s Death Master File for all of their policyholders retroactively to 1992 and every year going forward. If a beneficiary cannot be found, the insurer must consult the State of Florida’s Unclaimed Property Program, which will take over the search for the rightful beneficiaries.
Attention to the issue was brought forward by Florida Chief Financial Officer Jeff Atwater, who says there is a systemic practice within the life insurance industry in which insurers “sit on billions of dollars” in overdue and unpaid benefits.
Companies, he says, are doing little to remedy that by tracking down policyholders’ beneficiaries.
“For years, insurance companies had no problem sending their agents to their house for the weekly payment,” Atwater said in a Senate committee meeting in January. ‘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 further accused some in the industry of requiring beneficiaries to locate policy paperwork and present a death certificate in order to collect benefits. Many may not even be aware of the policy, he says.
The bill passed the House yesterday in a 109-0 vote and will return to the Senate for final approval. If it is passed there, it will go to Governor Rick Scott for his signature.
