SACRAMENTO – State Controller John Chiang will tonight be presented
with an award for being a "Lawyer of the Year" by the California Lawyer magazine.
Each
year, the magazine recognizes top attorneys for work in various areas
of practice. The Controller was recognized for leading multi-state
settlement agreements
with life insurance companies to restore the value of old life
insurance policies and pay beneficiaries.
Chiang's
five-year investigation into the life insurance industry's compliance
with state unclaimed property laws revealed an industry-wide practice of
companies
failing to pay death benefits to the beneficiaries of life insurance
policies. Instead, companies would draw-down the policies' cash reserves
in order to continue collecting premium payments from the deceased.
Once the cash reserves were depleted, the company
would cancel the policy.
Using
the State's 1959 Unclaimed Property law, which protects owners of lost
or abandoned financial accounts, the Controller reached settlements with
18 major
insurers that write the majority of all issued and active life
insurance policies nationwide. The broad-reaching settlements, joined by
more than 20 other states, restore the value of old life insurance
policies back to 1995 and commit the insurers to pay
an estimated $267 million in insurance proceeds to California
beneficiaries. If a company cannot find the beneficiaries, then the
property is sent to the Controller’s Office to safeguard until it is
claimed by the rightful owner or heir.
The
companies involved in the settlements are now in the process of sending
out life insurance proceeds and working with the Controller's Office to
track down
heirs in California.
Read more about the Controller's efforts to protect
life insurance policies.
See the original
announcement from the magazine.
