State Treasurer John Perdue’s office has returned nearly $1 million in unclaimed life insurance proceeds to beneficiaries since the beginning of fiscal 2019, a continued outgrowth of the Treasurer’s long campaign on the consumer issue.
The Treasurer’s Office Unclaimed Property Division returned $953,074 in life insurance benefits from July 1, 2018 to Jan. 16, 2019. These are life insurance policies in which the insured died and unbeknownst beneficiaries weren’t paid by the companies. Proceeds were reported as unclaimed property and the Treasurer’s Office informed beneficiaries and paid them.
“Often, parents and grandparents don’t effectively communicate that a life insurance policy exists,” Treasurer Perdue said. “If one doesn’t know he is the beneficiary of such a policy then he or she can hardly file a claim for lost assets, or unclaimed property.”
Treasurer Perdue took his argument to circuit court back in 2012, gradually igniting an increase of money reported and returned to such beneficiaries. In 2012, 20 claims resulted in an approximate $24,000 returned; in each succeeding fiscal year, that total swelled from $78,000 in 2013 to $1.1 million in FY 2018.
Approximately $5.1 million in life insurance benefit claims have been returned in state history. Of that amount, $4.1 million – or 80.3 percent – has been returned since Treasurer Perdue began legal action. Of the $4.1 million returned under Perdue’s administration, $2 million of that has been processed in less than the last two fiscal years.
“We continue to work on the transfers to unclaimed property stemming from our original court action,” Treasurer Perdue said. “We’re obviously excited about the future when it comes to this venue.
“Simply put, we want people to have what is theirs.”
Unclaimed property has nothing to do with real estate; it represents a financial asset from which the rightful owner has become uninitentionally separated. It was not the beneficiaries’ intention, for example, to not claim his or her policy proceeds.
The current fiscal year claims of a little less than a million is important because the fiscal year still has more than five months left in it, and more importantly, the reporting period for life insurance companies to surrender such money won’t roll around until May. This means more property should be reported later this fiscal year, and subsequently, beneficiaries should see checks.
Life insurance companies originally argued that a beneficiary must file a claim for life insurance proceeds, a qualification made impossible to meet, Treasurer Perdue argued, if the beneficiary was unaware of the policy.
The Treasurer eventually appealed to the state Supreme Court, which remanded the case back to the same circuit court, ruling life insurance companies have an obligation to determine whether insureds have died, and thus whether beneficiaries are due proceeds. In April 2016, former Gov. Earl Ray Tomblin signed into law HB4739, a bipartisan effort to clarify the obligations companies possess.
Integral to that outcome was a legislative requirement to use Social Security’s Death Master File, a definitive record of the deceased. Certain companies balked at the requirement, although some had used the same file to cut off annuity payments upon discovering the death of the investor.
Jackie Godwin did not know of a policy until the Treasurer’s Office held the proceeds. Godwin received a $70,000 benfit check from the Treasurer’s Office in 2017, relating to a policy from her late husband. She had a vague notion it existed but her husband died suddently without imparting information. Her insurance company turned over the funds, in wake of the Treasurer’s Office past victories.
“No one ever contacted me, no,” said Godwin, 52, of Parsons in Tucker County. “I never spoke to anyone from that insurance company. I was kind of angered. Actually, angered is putting it lightly. I could have used that years ago raising my kids. Then I wouldn’t have had to work three or four jobs at a time.”
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