March 29, 2013
HELENA – A bill requiring life insurance companies to find and pay Montana beneficiaries was signed into law Friday, ensuring Montanans receive the insurance benefits they are owed.
The new law comes in response to a string of national settlement agreements that forced life insurance companies to pay millions of dollars to beneficiaries. The companies were accused of making little to no effort to find beneficiaries, instead keeping the money for years before turning it over to states as unclaimed property. A recent study from Consumer Reports estimates that 1 in 600 Americans are owed an unclaimed life insurance benefit.
Sponsored by Sen. Mary Caferro, D-Helena, and backed by Insurance Commissioner Monica J. Lindeen, Senate Bill 34 passed both houses with wide, bipartisan margins.
"Montanans buy life insurance to help their families after they pass away. But far too often, insurance companies do nothing to find and pay Montanans the money they are owed on these policies," said Lindeen. "This isn't the bargain Montanans sign on for when they buy life insurance. This new law will help Montanans get the benefits they are owed."
SB34 requires insurance companies to find out if its policyholders have died by checking the Social Security Administration's death master file at least twice a year. If any of their insureds are deceased, the company must determine if any of surviving family is owed money. Finally, the company must pay benefits owed survivors.
If the company cannot locate survivors, the company must submit the unclaimed life insurance proceeds to the Montana Department of Revenue as unclaimed property. The state then lists the proceeds in a searchable, online database of unclaimed property, missingmoney.com. Montanans can search the database for free to see if they have unclaimed life insurance benefits.
"Montanans already mourning the death of a loved one shouldn't have to go hunting for life insurance benefits," Caferro said. "This bill gives help to those who really need it."
New York, Alabama, Maryland and Kentucky have already passed laws similar to Montana's.