Why guaranteed lifetime withdrawal benefit election rates continue to rise.
BATON ROUGE, La., May 5 -- The Louisiana State Treasurer issued the following news release:
State Treasurer John Kennedy is taking a stand against a bill being heard in the House Insurance Committee tomorrow that would make it harder for Louisiana taxpayers to collect unclaimed life insurance benefits.
"Most insurance companies do a good job of reporting unclaimed insurance proceeds, but some won't do the right thing unless threatened with an audit," said Treasurer Kennedy. "I cannot comprehend why the Legislature would want to make it easier for an insurance company to skirt its duty under the law and squirrel away even more of your money. This bill could cost policyholders an estimated $61 million in unclaimed benefits that will most likely never be reported to the state."
The Treasury is holding approximately $45 million in unclaimed life insurance benefits, nearly half of which was recovered by aggressive audits of large insurance companies. Based on data from Verus Financial and the Death Master File (DMF) database, Treasury officials estimate there could be an additional $61 million in life insurance proceeds that have never been reported to the state.
Rep. Greg Cromer has authored legislation that would require life insurance companies to use the DMF to determine if a policyholder has died and if insurance benefits are owed. However, HB 411 would only apply to policies issued after August 1, 2014. This concerns Treasury officials because it omits all policies that are currently in place.
"The insurance giants already hold people hostage with their skyrocketing premiums and continued rate increases, and now they want to hold on to even more of your money," said Treasurer Kennedy. "This bill will enable insurance companies to fatten their wallets even more with money belonging to Louisiana policyholders and their families."
Rep. Cromer serves as Chairman of the House Insurance Committee, which meets on Tuesday, May 6 at 9:30 a.m. in Room 3. HB 411 is the first item on the agenda.
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