Representatives from Nationwide Mutual Insurance where called upon by Florida officials to testify on how insurers handle life insurance payouts in the state. Several of the state’s insurance companies have been the target of controversy lately after being accused by regulators of holding back payouts.
Allegedly, these companies withhold funds despite having full knowledge that a policyholder has passed away. According to regulators, these funds may be being held in safekeeping until they are designated as unclaimed, at which point the insurer is no longer liable for payouts.
Nationwide assured that it was adhering to the state’s insurance laws and regulations regarding payouts and unclaimed funds. Senior vice president of the company’s annuity operations, Eric Henderson, asserted that the company pays billions in life and annuity benefits each year. The insurer further notes that it is ready, willing and able to comply with any changes regulators deems necessary to make the system more effective.
Currently, Nationwide runs their life insurance policies through a process that cross references the Social Security database, checking for instances where the policyholder has deceased. Out of the 1 million life insurance policies currently in force, the company found 1,000 cases where benefits were due. In these cases, Nationwide contacted beneficiaries and assisted them in filing claims in order to obtain benefits, including interest for time lapsed.
Florida will continue investigating the issue, hoping to put an end to concerns raised by the state’s regulators.