New Law Makes Insurance Companies Find, Pay Beneficiaries
Illinois Gov. Bruce Rauner has signed legislation requiring insurance companies to locate beneficiaries of unclaimed life insurance policies and pay them money they're owed. Democratic Treasurer Michael Frerichs says his office has identified more than $550 million in unpaid benefits owed to Illinois residents.
The Republican said Friday the state also is launching a website to help Illinois residents find out if they are a beneficiary of an insurance policy or annuity left by someone who died.
The Legislature unanimously approved the bill. It requires insurers to use federal death records to identify deceased policyholders whose life insurance proceeds remain unpaid.
“I’ve never met a man or woman who purchased life insurance with the expectation that the death benefits would stay with the insurance company rather than their family,” said Frerichs, in a statement. “Life insurance policies are purchased to help families push through difficult times.Today, grieving families no longer will be victimized by unscrupulous life insurance companies.”
Frerichs is being sued by one company that says it has no obligation to proactively find whether a policy-holder has died and to pay out benefits.
Business groups lobbied Rauner for a veto. They said using a private audit firm that earns a contingency fee for finding unpaid benefits has led to "overreaching audits.''