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NCOIL To Examine Unclaimed Benefits

State legislators are forming a new task force to examine the various approaches that states are taking regarding unclaimed life insurance death benefits...


State legislators are forming a new task force to examine the various approaches that states are taking regarding unclaimed life insurance death benefits.

This will be done under the auspices of the National Conference of Insurance Legislators (NCOIL), according to Alabama Rep. Greg Wren, who is the current president of NCOIL.

In an open conference call of state insurance regulators, Wren disclosed that NCOIL is intending to invite “all the stakeholders” to the table so they can work on the issue together.

A Moan and a Defense

That comment elicited an audible moan from someone who was sitting in on the call. The person made no other sound and offered no identification, but Wren heard it, acknowledged it, and pressed on.

NCOIL developed its unclaimed property model act due to the “hodgepodge of thought, and even some directions” legislators were noticing in the unclaimed property area, the Alabama state representative said. He alluded to various settlement agreements, iterations of unclaimed property legislation and the work of the NAIC as examples.

Now, two years later, NCOIL is forming a task force to bring all the key players together.

“The reason why that’s critical — even though there was a moan — is that, at our level, nine states have already adopted some form of unclaimed property piece of legislation,” he said, “and I can assure you that a lot of legislation is going to be introduced in the next 60 days.”

This issue “begs bringing all the parties together,” Wren said.

The Life Insurance and Annuities (A) Committee of National Association of Insurance Commissioners (NAIC) is the regulatory body that conducted the conference call in which the NCOIL president spoke up.

The purpose of the session was to discuss adding a new charge for the committee’s work in 2014. The charge proposes that the committee undertake an unclaimed death benefits study of its own. This study would be to determine whether recommendations are needed to address regulatory issues surrounding unclaimed death benefits.

Interest in adding the charge grew out of the continuing controversy surrounding whether and how often life carriers check the Social Security Administration’s Death Master File (DMF) for deceased life insurance policyholders. Regular checking of would ensure timely payment of policy proceeds to beneficiaries, regulators say.

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Complaints about failure to make timely checks have spawned a flood of legal and regulatory actions against carriers, as well as several new state unclaimed property laws as mentioned by Wren.

Looking for uniformity, consistency

The NCOIL president said he has not yet had a conversation about the new task force with NAIC leaders, but he said he would look forward to such. In particular, he indicated the task force will be seeking “uniformity and consistency” in this area.

Tennessee Commissioner Julie Mix McPeak, who chairs the A Committee and who led the conference call, said she thinks it is important to hear from “everyone affected by the different standards that are currently in play.”

As examples, she pointed to the NCOIL Unclaimed Life Insurance Benefits Act, which NCOIL developed in 2011 and updated in mid-2013. Other examples include various settlement agreements that companies have reached with regulators, and also standards set by various companies that are “just trying to comply,” she said.

What will be needed, if the proposed charge becomes final, is “a lot of focus” on what has worked, and maybe not worked, and on what is economically feasible, the Tennessee commissioner predicted.

(Incidentally, McPeak did remark on the moan heard during Wren’s comments. “That moan did not come from Tennessee,” she laughed.)

Annuities, too

It’s not just life insurance death benefits that need attention, according to Jason Berkowitz. Annuities are involved, too, said the vice president of regulatory affairs at Insurance Retirement Institute (IRI) in a follow-on comment.

IRI members are concerned about the assessment of post-settlement interest on situations involving annuity contracts, Berkowitz explained, noting that there could be some “double assessments” occurring.

He promised to send the committee a follow-up letter explaining the technicalities involved.

The task force conversation spun out from a discussion about how to phrase the proposed new charge for the committee. The focus was on whether the proposed study should address the “consistent handling” of unclaimed death benefits.

In the end, the legislators voted not to include those words. The charge adopted by the committee reads: “The Life Insurance and Annuities (A) Committee should undertake a study to determine if recommendations should be made to address unclaimed death benefits. Essential.”

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The NAIC Executive (EX) Committee will consider this charge for adoption at NAIC’s fall national meeting in Washington in mid-December.

, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda may be reached at

© Entire contents copyright 2013 by Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from


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