In a traditional life insurance and reinsurance relationship, a
life insurance company issues a policy to a policyholder and
reinsures the policy (usually via a block of business consisting of
the same or similar policies) with its reinsurer either by
coinsurance or on a yearly renewable term basis (or otherwise).
When the insured person dies, a death certificate is presented to
the policy issuing company and the policy benefits are paid to the
beneficiary. That triggers an indemnity claim under the reinsurance
contract and the reinsurer is obligated to pay its share of the
policy benefits to the ceding company. Simple.
But what happens if the insured person dies, but no one files a
death certificate and makes a claim against the policy? Who gets
the policy benefits? Does the insurer get to avoid paying any
benefits out on the policy or does the state have an interest in
this abandoned property? This has been a huge issue over the past
several years, with regulators
