Get What's Yours -- life insurance companies hanging on to your benefits (WSJ)

Why Decades-Old Life-Insurance Benefits May Still Go Unpaid

Smaller insurers balk at searching databases to check if policyholders have died; ‘It wasn’t priced in’

Kyle Haskins recently learned of a $74,000 payout from an insurance policy he didn’t know his grandmother had. Smaller firms are balking at the database searches that can turn up cases like his. PHOTO: AARON M CONWAY FOR THE WALL STREET JOURNAL

By 

LESLIE SCISM

Updated Feb. 26, 2016 9:41 p.m. ET

Some life insurers are fighting back against state officials who insist it is the companies’ job to check for dead customers.

The battle, led by small and midsize insurers, is reviving a touchy debate: When a policyholder dies, is it up to the insurance company or the beneficiary to make sure the benefit gets paid?

Historically, the burden has been on beneficiaries to file a claim after a death. Although that is still the typical way death benefits get paid, state authorities in the late 2000s began to compel insurers to turn over policyholder rosters so they could be checked against death databases.

Most large insurers agreed to the audits even though they believed the law didn’t require such extensive efforts. They decided that it wasn’t worth the reputational risk to fight the matter, and that new computer software made the change a logical one. Many were, in fact, already using similar checks to identify dead annuity owners in order to discontinue these customers’ payments.

So far the U.S.’s 22 biggest life insurers by premiums—including MetLife Inc., Prudential Financial Inc., New York Life Insurance Co.—have paid out more than $7.4 billion on old policies, either directly to beneficiaries, or to state unclaimed-property departments. The 22 insurers have agreed to regularly check a death database and conduct thorough searches to track down beneficiaries, according to officials in Florida, one of the lead states on the issue.

Now, authorities are encountering resistance as they try to get lesser-known outfits to do the same.

These insurers maintain that the long-standing system of expecting beneficiaries to file claims works well for nearly all deaths. They are also driven by economics—many of these insurers historically have sold small policies, not the million-dollar ones common at some large insurers, so they have less premium money flowing in to cover the costs that they say accompany the audits.

PREVIOUSLY

• Life Insurers Skimp on Payouts: States (April 28, 2011)
• Insurers Pressed on Lost Policies (Aug. 13, 2012)
• Are You Owed an Insurance Payout? How to Check (Feb. 22, 2013)

Kemper Corp., a Chicago-based insurer with a market capitalization of $1.4 billion, has been involved in legal fights in at least a half-dozen  states and hired lobbyists to make its case in some others.

“For more than a century, Kemper has paid all valid life-insurance claims in accordance with our policy terms and all state regulations,” the company said in a statement. “We believe it is illegal and improper for officials” to effectively demand retroactive changes to contractual terms. Kemper says about half of the roughly 20 states so far with new laws on insurers’ use of database searches limit the requirements largely to new policies. The other states apply the rules to existing policies.

The smaller companies’ opposition is emerging at a time when life insurers’ profits are being squeezed by low interest rates and increased competition.

The economics of searches are different between large and small insurers, particularly those such as Kemper that historically have focused on households of modest incomes. The average policy on Kemper’s books, for instance, has a death benefit of about $5,200, for which the consumer pays about $216 annually in premium.

Kemper, like some other smaller insurers, didn’t start asking customers for Social Security numbers until the 1980s, and for many years didn’t require exact birth dates, instead merely noting the buyer’s age at the time of sale. That makes it difficult to get reliable results in a database search, meaning insurers have to sift through paper records to fill in the gaps of identifying information. The costs, they say, quickly eat into profit generated by the small premiums, although state officials maintain those costs aren’t substantial.

“It wasn’t priced into the policies,” said Kimberly Moore, a vice president with N.C. Mutual Life Insurance Co., in Durham, N.C. She said the company still has policies on its books from decades ago with payouts in the hundreds of dollars.

Last year, N.C. Mutual successfully lobbied against a provision in a new state law that would have required life insurers to run all policyholders’ names through a death database. Kemper lobbied as well.

Ms. Moore said N.C. Mutual searches extensively for a policyholder and beneficiaries when the insured reaches a policy’s “maturity” age, typically age 100. “We feel we do a good job of finding people,” she said.

Many state officials see the issue as one of the most important they have tackled for consumers.

“I’ve talked to lots of people and I haven’t had more passionate and angry conversations than when they hear that insurance companies aren’t paying out benefits,“ said Illinois Treasurer Michael Frerichs. Kemper sued the Illinois State Treasurer in October to limit the scope of the state’s audit.

“At the end of the day, no one sits down and signs a life-insurance policy saying it may or may not be paid,” Mr. Frerichs said. “They don’t read the fine print.”

Florida’s chief financial officer, Jeff Atwater, called concerns about costs “a hollow argument,” saying none of the life insurers are small enough to qualify as “moms and pops.” Also, he contends, insurers are reluctant to allow audits because holding on to overdue benefits enables them to keep and invest the money longer.

Industry officials don’t dispute that overdue benefits have built up over time. But trade group American Council of Life Insurers says the problematic policies are a tiny percentage of the $1 trillion that was paid the conventional way over the past 20 years.

A growing number of consumers are applauding states’ efforts.

Kyle Haskins, a junior at Xavier University in Cincinnati, recently learned from Florida’s unclaimed-property department that MetLife had turned over about $74,000 in proceeds from a policy that his grandmother, who died about 15 years ago, had bought when she was a special-education teacher in Ohio.

“It is kind of shocking they have billions of dollars that haven’t been paid out in life-insurance policies,” he said of the industry. “I’m not upset or mad: I understand that’s how business works.”

MetLife said it couldn’t comment on any specific case for privacy reasons, but that it is “thrilled that Mr. Haskins has received the life-insurance proceeds he was due.”

Find Your Lost Funds - Savings Bonds (Detroit Free Press)

October 6, 2011


Susan Tompor: Billions in savings bonds sit uncollected

BY SUSAN TOMPOR
DETROIT FREE PRESS PERSONAL FINANCE COLUMNIST

Who couldn't use an extra $500 or $1,000 or more?

So why is $16.2 billion just sitting there uncollected in the form of U.S. savings bonds?

Maybe an uncle or aunt bought a savings bond for you a long time ago and you never saw it. Maybe someone died.

The federal government doesn't usually send notices informing you that you did not cash a bond that stopped earning interest 20 years ago.

About 45 million U.S. savings bonds do nothing but collect dust. That's if they're shoved aside in a shoe box and haven't been thrown out.

Never think you could lose anything as valuable as a savings bond? You put everything important in a secure spot? Think again.

"In my house, that 'safe' place has changed three or four times in the last 20 years," said Daniel Pederson, who has a Web site called www.bondhelper.com and is author of the book "Savings Bonds: When to Hold, When to Fold."

Pederson, a Monroe-based expert on bonds who has held seminars that help bond owners avoid costly mistakes, says he knows he's missing a few bonds, too.

"I have two I bought for my son. I don't know where I have them right now."

I know what he means. I've been writing about savings bonds for much of my career and was shocked this summer to discover that I lost more than a dozen of them.

What's lost under your mattress?

Hunt for those savings bonds

One tough part about losing your parents is that sometimes you're forced to tie up loose ends. For many families, like mine, that means looking for lost U.S. savings bonds.

My parents, maybe like yours, bought paper savings bonds through payroll deduction and for special occasions.

During parts of the 1980s, savvy savers actually rushed to buy U.S. savings bonds -- I am not kidding -- to lock in high interest rates. My mother nudged me to buy savings bonds back then, too, when I was in my first job.

Since Mom was my go-to gal for advice, I took my checkbook to the bank and bought those bonds. I wasn't the only one.

Somewhere out there, Americans are looking at more than 665 million savings bonds valued at more than $180 billion. Most are still earning interest.

But about 45 million of those bonds worth $16.2 billion are likely missing and no longer earning any interest. They need to be cashed if they can be found.

But Daniel Pederson, a Michigan-based expert who runs www.bondhelper.com, said many people cannot find their bonds. Think of all the people who moved while in the military; switched jobs in their careers; stored stuff in someone else's attic.

Pederson said he thinks he may have lost a few bonds after he took some bonds to talks he gave to groups. After my father died several years ago, I inherited the chore of tracking Mom and Dad's savings bonds. A lifetime of accumulating bonds meant I had figure out which bonds would mature when and drive Mom to the bank to cash some bonds each year. Mom's memory was fading, but her bonds had a life of their own. Sadly, I miss our crazy little trips to the bank.

But after Mom died, we had to ask: Did we have all her bonds?

Everyone should ask that question. "The toughest part is just getting started," Pederson said.

First stop: The Treasury Department Web site: www.treasuryhunt.gov .

You enter your Social Security number and if you've got a bond in the Treasury Hunt database, you'd receive an e-mail alert.

But the e-mail does not tell how many bonds you're missing or what they're worth. You're prompted to submit contact information.

The Bureau of Public Debt said a little over 1% of the 3 million searches conducted online this year resulted in people sending back contact information. Publicity on ABC's "Good Morning America" this summer generated more searches than usual.

Michigan resident Catherine Townsend searched the Treasury Hunt after seeing a segment on TV, but she didn't find a bond for herself. She searched for her husband and found a bond he bought when he first started working at General Motors in the mid-1970s.

"He probably forgot he even had it," she said. "Anybody can go online and try to see what they have."

After filing out the proper paperwork, the couple received a little more than $100.

The key is taking the next step. "Some people don't follow up," said Lateefah Thompson, public affairs specialist for the Bureau of Public Debt. What can be confusing is that Treasury Hunt will not find every bond. You need to do more work to find really old bonds -- or some relatively newer ones.

The online system finds Series E bonds issued in 1974 and after. It only identifies bonds in that group that are not earning interest. The best way to find out about all possible lost or stolen bonds is to contact the Treasury, Thompson said, and submit Form PD F 1048, a six-page form with instructions. Of course, sometimes tearing up your house works, too. Remember those bonds Mom urged me to buy in the mid-1980s?

I thought I had them all -- they won't stop earning interest until 2015 and 2016. But somehow, my sister found a stack of my bonds in my parents' cedar chest when she looked for other paperwork.

I moved a bit in the '80s. Did I give the bonds to my parents for safekeeping?

By filing the form 1048, we discovered an unredeemed 1952 bond that we had no clue about. That bond cost $18.75 originally and is now worth $170.66. It stopped paying interest in 1992. Maybe, my parents lost that bond when they moved from my grandmother's house to their first and only home?

In all, the Treasury search found a dozen bonds that belong to my sister, other family members and me. Three unredeemed bonds bought in the 1970s stopped earning interest in 2005 and 2007. Overall, the dozen discovered bonds are worth about $10,000 before taxes. Now, we've got more paperwork. Many are still earning interest, so all would not have been found with just Treasury Hunt.

The young man at the Bureau of Public Debt who is looking at this mess called me one day and told me three times that I should not be intimidated by all the forms he would send me. He sent a very detailed letter on what to do next. I begged my husband to look at the forms -- and this guy's roadmap.

One "lost" bond in the mix is a Series I inflation-indexed savings bond I had bought my son when he was little.

My son, with an eye on high school and college, said: "Well, you better find that bond."

Contact Susan Tompor: 313-222-8876 or stompor@freepress.com

Getting Money Back From the IRS (www.irs.gov)

Does the IRS Have Money Waiting For You?

If you earned income in the last few years but you didn’t file a tax return because your wages were below the filing requirement, the Internal Revenue Service may have some money for you. The IRS also has millions of dollars in checks that are returned each year as undeliverable.
Here’s what you need to know about these two types of “missing money” and how to claim it:
Unclaimed Refunds
Some people earn income and may have taxes withheld from their wages but are not required to file a tax return because they have too little income. In this case, you can claim a refund for the tax that was withheld from your pay. Other workers may not have had any tax withheld but would be eligible for the refundable Earned Income Tax Credit, but must file a return to claim it.
• To collect this money a return must be filed with the IRS no later than three years from the due date of the return.
• If no return is filed to claim the refund within three years, the money becomes the property of the U.S. Treasury.
• There is no penalty assessed by the IRS for filing a late return qualifying for a refund.
• Current and prior year tax forms and instructions are available on the Forms and Publications page of www.irs.gov or by calling 800-TAX-FORM (800-829-3676).
• Information about the Earned Income Tax Credit and how to claim it is also available on www.irs.gov.
Undeliverable Refunds
Were you expecting a refund check but didn't get it?
• Refund checks are mailed to your last known address. Checks are returned to the IRS if you move without notifying the IRS or the U.S. Postal Service.
• You may be able to update your address with the IRS on the “Where’s My Refund?” feature available on IRS.gov. You will be prompted to provide an updated address if there is an undeliverable check outstanding within the last 12 months.
• You can also ensure the IRS has your correct address by filing Form 8822, Change of Address, which is available on www.irs.gov or can be ordered by calling 800-TAX-FORM (800-829-3676).
• If you do not have access to the Internet and think you may be missing a refund, you should first check your records or contact your tax preparer. If your refund information appears correct, call the IRS toll-free assistance line at 800-829-1040 to check the status of your refund and confirm your address.

Finding Lost Assets: Treasure Hunt (bankrate.com)

5 tips for finding unclaimed property
By Sonya Stinson • Bankrate.com



Where to find lost loot
Are you thinking that you could sure use that electric company security deposit you left behind the last time you moved? Or, maybe you found a safe-deposit box key in the bottom of a drawer but don't have the vaguest recollection of where the box might be and what's in it.

There may still be a way for you to get your hands on those assets.

For just about every category of unclaimed property, there is a government lost-and-found department. You can usually search for and retrieve your missing property for free by going directly to the agency responsible for its safekeeping. Based on a review of several government agency websites, the process typically involves looking for your name on a list, completing a claim form, having it notarized and presenting some type of documentation proving you are the rightful owner of the assets.

Here are five examples of the kind of lost loot that might turn up when you start searching.


Property is held in state repositories

All U.S. states and territories and the District of Columbia have programs that help owners of unclaimed property find those assets. According to the National Association of Unclaimed Property Administrators, there is at least $32.8 billion worth of unclaimed property in state custody.

The list includes checking and savings accounts, stocks, insurance payments, annuities, utility security deposits, mineral royalty payments and a host of other things you may have forgotten you owned or didn't know were worth anything. Besides assets that come directly from financial accounts, state-held property also may include proceeds from the sale of stocks and bonds, or from safe-deposit box contents sold at auction when it became impractical to store them.

The NAUPA website has links to every state's department in charge of unclaimed property. It also links to MissingMoney.com, a national website in which most states participate.

"If you've moved around a lot, that may be convenient, instead of checking several different states," says NAUPA President John Gabriel. "But if you've pretty much been in one or two states only, it's easier to go directly to those states -- especially if your name is common -- so you don't have to filter through a bunch of (unrelated) stuff."


Find unredeemed savings bonds
If you own or have inherited a matured U.S. savings bond that you never got around to cashing, you may be able to redeem it by going to Treasury Hunt, the U.S. Treasury Department's searchable database.

The Treasury is currently holding about $16.4 billion in matured, unredeemed U.S. savings bonds, says Joyce Harris, director of public and legislative affairs for the department's Bureau of the Public Debt.

Only Series E bonds issued in 1974 and after are included in the database. If you are the heir to the original owner of the bond, you'll need to supply the owner's Social Security number and legal documentation of your relationship to that person to get the unclaimed property. For other types of bonds, Harris says you can fill out a form from the website and mail it in.


Finding accounts from shuttered banks
If you had an account with a bank or savings and loan that was closed by a regulatory agency between January 1989 and June 28, 1993, the Federal Deposit Insurance Corp. may have some money with your name on it. Unclaimed insured deposits are available for as long as the institution is still under FDIC receivership. You may claim a dividend check for an uninsured portion of a deposit after that period if the U.S. Postal Service returned the check as undeliverable. Here's where to find out if you're on the FDIC's unclaimed funds list.

"In the mid '90s, there was a change in the law, (which is) why our database goes only until June 28, 1993," says FDIC spokesman David Barr. "Now, when a bank fails, any unclaimed funds on hand 18 months after the closing are returned to the FDIC, (which) then turns them over to the individual state unclaimed property bureaus."

The National Credit Union Administration's Asset Management and Assistance Center in Austin, Texas, is in charge of paying out members' share accounts whenever a federally insured credit union is liquidated. You can access a list of unclaimed deposits online.


Get your tax refund
Say your income tax refund check got lost in the mail or was returned as undeliverable because you moved. To find out how to get your unclaimed tax refund back, use the IRS search tool that's aptly named Where's My Refund?

You can file a claim to replace a lost, stolen or destroyed refund check once after 28 days have passed since the IRS mailed the check. You may also be able to change your address online to get an undeliverable check resent.

To get information about your refund, you'll have to plug in your Social Security number, filing status and the amount of refund due.

You may also be wondering about a state tax refund. In many states, unclaimed state tax refunds are handled by that state's department of revenue.

The database will only contain information from your most recent tax return. Your chance to claim an old undeliverable refund check expires once you have filed a return for the current tax year, according to the IRS.


Find old pension benefits
If you had a pension plan with a company that went out of business and you haven't heard anything about what happened to your unclaimed benefits, check the missing participants' listing of the Pension Benefit Guaranty Corp.

The PBGC is a federal corporation created to insure private employers' defined-benefit plans. Its database does not include profit-sharing and 401(k) plans.

For 401(k)s, profit-sharing plans and IRAs, you might check the website of the National Registry of Unclaimed Retirement Benefits, which offers free searches of its database.

The payoff for your search could come in the form of an annuity that your former employer bought from a private insurance firm -- money the company deposited in a bank or benefits that PBGC pays you if the company transferred its pension funds to the agency when it closed, according to the PBGC website. You may also file a claim if you are the survivor of the worker who was entitled to the benefits.


Sonya Stinson is a freelance writer from New Orleans.
Posted: Dec. 28, 2010

Treasure Hunt: Finding Your Unclaimed Property (from WSJ)

APRIL 28, 2011.
How to Find Unclaimed Property: From 'Tracers' to Websites, Many Ways to Snare Money .
By VERONICA DAGHER

If you feel you may be due unclaimed property, or just want to find out, there are several ways to hunt it down.

Some people discover that they have unclaimed funds only after a finder or "tracer" notifies them they have unclaimed
property and offers to help them retrieve it for a fee, says
Mark Kantrowitz, publisher of financial-aid website FinAid.org.
He also runs the free site www.unclaimedproperty.

.Unclaimed life-insurance proceeds have come into the spotlight as regulators are looking into whether insurers are turning over these funds to states in a timely fashion.

How quickly companies need to hand over these funds varies by state, and the total amount of unclaimed funds is in the billions.

New York alone has received roughly $400,287,736 in unclaimed life insurance policies since 2000, says Vanessa Lockel, a spokeswoman for the Office of the State Comptroller. She says the state has refunded about $64,772,228.

Here are some ways to claim your money:

• More Than Insurance: Life-insurance proceeds are just one type of unclaimed property. Other examples could include a refund check from a utility company, stock dividend checks that have been going to a stale address or proceeds from the estate of a relative who died without a will and whose estate took several years to be settled in court.

• How to Start: Mr. Kantrowitz recommends people begin their search at www.missingmoney.com, a free database operated by ACS Unclaimed Property Clearinghouse, which is owned by Xerox Corp. and provides unclaimed property support services to state governments.

The site searches unclaimed property websites of several states where users can search by last and first name to find funds. If no unclaimed funds show up, Mr.
Kantrowitz says, a searcher should individually check the databases
of any of the states they have lived in.

He recommends that they conduct a new search every year, because it sometimes takes a few years for states to post records of missing funds.

• Filing for Funds: Once someone discovers they have missing funds, they can file a claim with their state's unclaimed property office.

If the money is in someone else's name, they will likely have to provide proof they are the beneficiary, such as a copy of the deceased's will, Mr. Kantrowitz says.

Other places to look include Pension Benefit Guaranty Corp., which has a database for unclaimed pension benefits, and the Internal Revenue Service, which may be holding unclaimed income tax refund money.

If you suspect that you missed a refund, contact the IRS directly.

• Tax Watch: Speaking of taxes, anyone counting on a windfall from unclaimed property should keep in mind that they may have to fork part of it over. If you find and receive the proceeds of long-lost stock which a state has liquidated, for instance, you may face a tax bill.

Write to Veronica Dagher at veronica.dagher@dowjones.com