WASHINGTON BUREAU — The National Association of Insurance Commissioners (NAIC) has formed an unclaimed property task force, and several states have hired Verus Financial L.L.C. – a firm that conducted a broad unclaimed property audit – to conduct examinations focusing on unclaimed property issues.
California hired Verus, Waterbury, Conn., to undertake unclaimed property audits in July 2008, and the California controller’s office says 37 states have hired Verus to determine whether life insurers are doing enough to find out whether life insurance policy insureds have died, locate the beneficiaries when the insureds have died, and turn unclaimed property over to the appropriate state agencies. Connecticut joined the list in late April.
The lead states on the audit are Massachusetts, Michigan and Tennessee, according to a document posted by the California controller’s office.
The Florida Office of Insurance Regulation (OIR) plans to hold an unclaimed property hearing May 19 and has invited representatives from units of MetLife Inc., New York (NYSE:MET), and Nationwide Mutual Insurance Company, Columbus, Ohio, to participate.
Florida officials say Verus has been retained to look at unclaimed property practices at a total of six insurers. The review will include records going back to 1992, Florida OIR spokesman Jack McDermott says.
“Before we can take regulatory action, or recommend statutory changes (if any) to the Legislature, we must ascertain the facts,” McDermott says. “This is the purpose of the ongoing examinations, and the purpose of the evidentiary hearing on May 19th.”
The insurers participating in the hearing “are not being required to produce any information for the hearing – just have senior officers appear and answer questions about their company’s practices” regarding turning over unclaimed annuity assets and life insurance policies to the states, McDermott says.
Meanwhile, at the NAIC, the Florida OIR is heading the “Multistate Examinations/Settlements Covering Life and Annuities Claim Settlement Practices Including Unclaimed Property.”
The list of other states participating in the task force includes Pennsylvania, New Jersey, Illinois, California, West Virginia, Iowa, New Hampshire, Louisiana and North Dakota.
The NAIC has crafted a model law to deal with unclaimed property issues, but the model law has only been enacted in three states — Alabama, Illinois and Nevada, an industry official says.