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Copyright (c) 2012 Connecticut Insurance Law Journal Association
Connecticut Insurance Law Journal

Note: A Billion Dollar Problem: The Insurance Industry's Widespread Failure to Escheat Unclaimed Death Benefits to the States

2012 / 2013

Connecticut Insurance Law Journal

19 Conn. Ins. L.J. 363


Devin Hartley*


"I'm concerned that the [life] insurance industry is not holding up its end of the sacred bargain it struck with its clients when it issued life insurance policies in the first place." 1

Since its inception, the life insurance industry has been relied upon by consumers as an ameliorating corollary to a tragedy; a type of financial safety net to be cast in the unfortunate event of a loved one's death. For most people, a life insurance policy represents a hard-earned effort to provide their loved ones with some measure of financial support, or at the very least, a means by which to cover funeral expenses. 2 In many cases, the foundation for these policies has been laid through decades of premium payments, paid by the insured with the understanding that the insured's heirs would one day reap the rewards. 3 Currently, however, there are widespread practices among the insurance industry which suggest that this understanding on the part of the consumer may be mistaken.

Specifically, it has been estimated that over 1 billion dollars in death benefits currently sit on the books of insurers, 4 unclaimed by the very beneficiaries that the insurer sought to protect, notwithstanding the fact that the industry has available to it the technology that would allow it to identify and reach out to those beneficiaries. 5 The situation is made more egregious by the fact that insurance companies regularly employ such technology to terminate annuity payments while failing to use this same ...
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