Prudential to Overhaul Escheat Practices for Hard-to-Locate Beneficiaries
SPRINGFIELD—February 2, 2012. Illinois Insurance Director Andrew Boron today announced a multi-state, multi-million dollar settlement agreement with Prudential Insurance Company of America and its affiliates (Prudential) to improve the process of identifying life insurance beneficiaries. Through this agreement, Prudential will invest resources into efforts to locate beneficiaries who have not received life insurance policies they are entitled to after an insured individual has died.
Life insurance companies can find out that an insured individual has passed away by comparing policyholder records to the Social Security Administration’s records. Some companies have used this information to discontinue consumer annuity payments, but have not used this same information to make life insurance payments to beneficiaries.
“Many Illinois families depend on the financial security of life insurance following the passing of a loved one,” Governor Pat Quinn said. “This agreement reassures families that they can depend on this benefit when it is needed the most.”
For several years, Prudential has used Social Security data to make life insurance payments when it discovers an annuity holder has died or, when it has a precise match to a name, a social security number and a date of birth. Under this agreement, Prudential has committed to building a system that will utilize all data, from the Social Security Administration and any other sources, to locate beneficiaries. If the beneficiary cannot be located, Prudential has agreed to turn the money over to State unclaimed property officials (in Illinois, the Illinois Treasurer). The Illinois treasurer’s office will then utilize their websites to help consumers receive the life insurance money.
The agreement specifically requires Prudential to:
· Overhaul its computer system and revise its business practices to better utilize available information to identify life insurance beneficiaries.
· Pay a national $17 million settlement payment.
· Return monies promptly to beneficiaries when located through revised search efforts.