Unpaid Insurance Benefits Issues Continue To Intensify

Attention to unclaimed property issues affecting life insurance companies – including issues relating to unpaid life insurance and annuity benefits – has significantly escalated in recent weeks, due to regulatory actions, media coverage, and public expressions of interest by the plaintiffs' bar. This Legal Alert discusses those developments and puts them into perspective.

Given the precarious financial condition of many states, the pace of unclaimed property audits has increased rapidly in the past several months. Over the past three years, more than 20 insurance companies have become subject to unclaimed property audits by 35 cash-hungry states. What many insurers originally viewed as routine unclaimed property audits of their business have now evolved into a challenge to alleged widespread industry practices pertaining to compliance with states' unclaimed property laws. State regulators are asserting that insurers are engaging in an alleged industry-wide practice