Five-year legal fight against some life insurance companies explained

If named a life insurance policy beneficiary, you should receive what is yours. It doesn't even matter if you don't know the policy exists.

That is the crux of this office's five-year legal fight against some life insurance companies. In 2012, I filed suit alleging some companies were either not paying beneficiaries their due proceeds or failing to report the money as unclaimed property. That litigation is ongoing today.

The issue is simple but demands remedy. It often goes something like this: A West Virginian buys a life insurance policy and tucks it in a safe deposit box. After a long, fruitful life, he passes and no one knows the policy exists.

In the intervening years other people pass similarly, without leaving word. The totals mount as companies hold onto the money We don't have to pay without a claim being filed, some say. But my questions is this: How do you file a claim on an asset you don't know exists?

That's what we've been trying to answer since first taking legal action in 2012. And it appears we're starting to get more cooperation. The Unclaimed Property Division has had reported $16.4 million in life insurance proceeds since 2012, more than five times the amount the office took in prior to that year. The $16 million total is of June 30.

Contrast that with life insurance reported through 2012, prior to circuit court litigation: $3.8 million. In 2012 alone, life insurance companies reported $1.3 million or about one-third of all life insurance reported to that point. So before 2012, only $2.5 million had been reported, which is more than five times less the current figure.

At issue in determining payouts is the use of Social Security's Death Master File. Checking the DMF or a similar database is a near foolproof way to see if an insured person has died and would necessitate a payout on the policy After all, those same companies use it to cut off an annuity upon death.

Our efforts have not been met without challenges. In December 2013, a circuit court judge ruled in favor of insurance companies, on those grounds a claim must be filed in order to receive life insurance funds. Again, I ask, how does one file for assets he or she is not aware of? These policies are the definition of unclaimed property.

Unclaimed property is any asset from which an individual has become unintentionally separated. Examples include a forgotten utility deposit, a left-behind final paycheck or uncashed stock dividends. And life insurance proceeds.

The case migrated to the state Supreme Court in June 2015. The high court ruled that the death of the insured person triggers a duty to locate beneficiaries or report proceeds as unclaimed. The Supreme Court remanded the cases back to circuit court for resolution along those lines.

We won another victory in April 2016, when former Gov. Earl Ray Tomblin signed into law HB4739, a bipartisan effort to clarify the obligation companies possess. Use of the Death Master File to determine beneficiary payout or unclaimed property reporting was part of the law.

Earlier this year, the same court denied a motion to dismiss the lawsuits we filed. This most recent decision allows all pending cases to move forward. I encourage anyone to check our unclaimed property list if there is any question as to whether a loved one died with a life insurance policy payable upon death. Go to www.wvtreasury.com.

It's simple; I want people to have what is rightfully theirs.