In California there is close to $9 billion in unclaimed money and unclaimed property with over $350 million of that in unpaid insurance claims. Occasionally the California State controller’s office will do routine audits of business to ensure they are following the law in regards to unclaimed money. Legally all companies are required to turn over any accounts that have been dormant for 3 or more years. An audit by California controller Betty Yee’s office in 2008 found that there were several insurance companies that held onto these claims with little to no effort in reaching out to the rightful owners of these unclaimed insurance accounts. In fact, many of them invested the money and then pocketed the money made off the unclaimed insurance payouts.
40 states banded together in 2011 to get over $7.4 billion in unclaimed insurance claims, with the insurance companies responsible for returning over $5 billion and the remaining $2.4 billion placed into unclaimed money claims for each state. California got back over $480 million in unclaimed money claims and as of March 2017 returned over $110 million with over $350 million still remaining, waiting to be claimed!
A recent LA Times story outlined one families struggle to get the money rightfully owed to them:
Brandee Usadel’s grandfather died in 1983. He had a pair of life insurance policies from MetLife but, Usadel said, the company never cut her parents a check and they never pursued the benefits they were owed.
“I don’t think my parents knew about the insurance,” she told me. “I don’t think my grandfather ever told them. He probably forgot about it and then he got sick.”
Usadel’s dad passed away in 1999. Her mom died last year.
She said she recently got around to digging into the family finances and became aware of her grandfather’s unpaid benefits. She has a death certificate but no policy numbers.
“I’m not sure what I should do,” Usadel, 52, said. “I don’t think I can trust MetLife to help.”
That’s understandable. Yee said California’s audit of MetLife and other insurers found that the companies were ignoring the three-year rule for unclaimed cash. Worse, they’d shrugged off their responsibility to find beneficiaries named by their policyholders.
California’s Unclaimed Property Law requires banks, insurance companies, corporations, and certain other entities to report and submit their customers’ property to the State Controller’s Office when there has been no activity for a period of time (generally three years). Common types of unclaimed property are bank accounts, stocks, bonds, uncashed checks, insurance benefits, wages, and safe deposit box contents. Controller Betty Yee safeguards this lost or forgotten property as long as it takes to reunite it with the rightful owners; there is no deadline for claiming it once it is transferred over to the State Controller’s Office. It is easy to find out if the Controller is protecting property in your name.