New Florida law requires life insurers to do more to find beneficiaries
Life insurance companies will have to do more to locate the beneficiaries of those who die under a bill Gov. Rick Scott signed into law today.
The new law requires life insurers to search the Social Security Administration's Death Master File for all of their policyholders retroactively to 1992 and every year going forward to identify beneficiaries. If a beneficiary cannot be found, the insurance company must turn the policy over to the State of Florida’s Unclaimed Property Program, currently overseen by Florida Chief Financial Officer Jeff Atwater, where the state will continue to look for rightful beneficiaries.
Atwater has made the issue a top priority this year because he said too many life insurance companies are sitting on billions of dollars in overdue, unpaid life insurance benefits. He said some companies were doing little to track down families whose loved ones paid their premiums for years.
"For years insurance companies had no trouble sending their agents to their house for the weekly payment," Atwater said during a Senate Banking and Insurance committee meeting on the topic 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 said it was discovered that many life insurance companies built in business practices that would shield them from knowing if a policy holder died so it would reduce payouts.
The bill (SB 966) Scott signed was sponsored in the Florida Senate by Sen. Lizbeth Benacquisto, R-Fort Myers. In the House, Rep. Bill Hager, R-Delray Beach, sponsored similar legislation.