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New Montana law targets life insurance companies

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HELENA, Mont. (AP) – A bill that has been signed into law by Montana Gov. Steve Bullock requires life insurance companies to search for beneficiaries when a policyholder dies, even if no claims have been submitted.

The law was a response to a series of national settlement agreements in which life insurance companies were charged with making little to no effort to find beneficiaries, instead keeping death benefits for years before turning them over to states as unclaimed property.

See also: John Hancock Companies settle with 6 states

Senate Bill 34, requested by Insurance Commissioner Monica Lindeen and sponsored by Sen. Mary Caferro, D-Helena, requires life insurance companies to check a Social Security Administration file at least twice a year to find out if any of its policyholders have died. In those cases, the company must determine if any surviving family members are owed money and pay the benefits or turn over the money to the state as unclaimed property.

“Montanans buy life insurance to help their families after they pass away,” Lindeen said in a statement. “But far too often, insurance companies do nothing to find and pay Montanans the money they are owed on these policies.

“This new law will help Montanans get the benefits they are owed.”