NY Governor Says Insurance Companies Have To Pay Unclaimed Life Insurance Proceeds
After nearly a year-long investigation by NY’s Department of Financial Services on life insurers practices, Governor Cuomo announced new regulations requiring all life insurers conducting business in New York to regularly search a government list of recent deaths to find policyholders, then to pay the beneficiaries of policies for which no claims have been made.
The DFS investigation yielded 7,525 payments amounting to $95.9 million to New York consumers.
Says Governor Cuomo, “People sacrifice to buy life insurance to help their loved ones after their death, so it’s reasonable to make sure their families actually receive the benefits when they are eligible. Our investigation clearly proved that life insurers should be checking the list of recent deaths as a standard practice to find out when benefits may be due.”
The new regulation require insurers to implement the following procedures:
- Cross-check their policies at least every three months with recent deaths using the Social Security master File of deaths or another database acceptable to the Superintendent of Financial Services;
- When a policy is sold, request more detailed beneficiary information such as social security number and address to facilitate locating and making payments to beneficiaries when a death occurs;
- Search for multiple policies on the same person in the files of all insurers owned by a holding company; and
- Cross-check policies with consumer requests received through the State’s new Lost Policy Finder, a free online service, to help consumers locate life insurance policies that have been lost of misplaced.