The West Virginia State Treasurer has filed lawsuits against a dozen insurance companies, accusing them of not complying with its unclaimed property regulations.
On September 20th, American General Life and Accident, AXA Equitable Life, Hartford Life and Annuity, Lincoln National Life Insurance, Massachusetts Mutual Life, Metropolitan Life, Monumental Life, Nationwide Life, New York Life, and Prudential Life were each named as individual defendants. Within the lawsuits, State Treasurer John D. Perdue notes that the insurers violated the West Virginia unclaimed property regulations by failing to report and escheat insurance proceeds wherein the beneficiary could not be located by the insurance firm.
Furthermore, the lawsuits claim that the insurance companies have a variety of means at their disposal, such as the Social Security Death Master File, to identify deceased policy owners, determine if proceeds are due, and locate beneficiaries. The Treasurer notes that the insurers being sued have “retained and earned vast income from proceeds which rightfully should have been paid to the West Virginia Unclaimed Property Fund.”
The conditions of the lawsuits would require the respective insurers to remit all payable insurance proceeds to the State Treasurer, while also covering court costs and attorney fees. Perdue is also seeking an additional 12% penalty and a variable per day fine calculated from the date when the proceeds were first deemed reportable, along with a penalty of 25% of the value of each reportable policy.
West Virginia is not alone in its pursuit of insurance companies. Within the past year, several insurance companies have been investigated by state unclaimed property administrators and have agreed to multi-state settlements. In fact, since 2008 California has initiated audits of 26 individual insurers over their procedures for verifying deceased policy holders and identifying beneficiaries.
This past April, MetLife agreed to a $500 million multi-state settlement as a result of an investigation led by California. More than 30 additional states shared in that settlement, including West Virginia.