TALLAHASSEE, Fla. – Florida made national news when it required life insurers to look back 25 years and pay beneficiaries who have not come forward, but four companies have filed a legal challenge to the legislation.
Barry Richard said making the companies find beneficiaries could result in higher rates, since the interest they earn on the unclaimed funds help cover overhead.
Authors of the legislation said insurance companies regularly check the national death master file, but when some companies run across a customer who has died, they don’t seek out the beneficiary of the life insurance policy. Lawmakers said millions are being withheld.
The legislation passed both chambers without a single "no" vote. Chief financial officer Jeff Atwater was featured on national news magazines.
“Literally, the consumers won in this legislative session,” he said.
But now four companies, under the banner of Kemper Home Services, are challenging the law.
Their website lists a half-dozen offices for the company in Florida. One of them is in a strip mall. We went to their Tallahassee office, just a stone's throw from the Capitol.
"Can you tell me who your customers are?” reporter Mike Vasilinda asked.
But we were told to contact the home office.
High-profile attorney Barry Richard said the state can’t force the companies to go back 25 years and look for beneficiaries. He also argues policies approved by the state don’t require the companies to pay until someone provides proof of death.
“The insurance companies are not objecting to the law going forward," Richard said. "They are objecting to the retroactive provision on the basis of the fact that it violates the constitutional right not to have the government impair contracts as they exist.”
The state will argue that it’s hard for a beneficiary to come forward when they never knew the policy existed.